Imperialism (Still) Rules

By Jomo Kwame Sundaram

HARARE, Zimbabwe, Feb 11 2025 (IPS) - Many in the West, of the political right and left, now deny imperialism. For Josef Schumpeter, empires were pre-capitalist atavisms that would not survive the spread of capitalism. But even the conservative Economist notes President Trump’s revival of this US legacy.

Economic liberalism challenged

Major liberal economic thinkers of the 19th century noted capitalism was undermining economic liberalism. John Stuart Mill and others acknowledged the difficulties of keeping capitalism competitive. In 2014, billionaire Peter Thiel declared competition is for losers.

A century and a half ago, Dadabhai Naoroji, from India, became a Liberal Party Member of the UK Parliament. In his drainage theory, colonialism and imperial power enabled surplus extraction.

As the Anglo-Boer war drew to a close in 1902, another English liberal, John Hobson, published his study of economic imperialism, drawing heavily on the South African experience.

Later, Vladimir Ilyich Lenin cited Hobson, his comrade Nikolai Bukharin and Rudolf Hilferding’s Finance Capital for his famous 1916 imperialism booklet urging comrades not to take sides in the European inter-imperialist First World War (WW1).

Three pre-capitalist empires – Russian, Austro-Hungarian and Ottoman – ended at the start of the 20th century. Their collapse spawned new Western nationalisms, which contributed to both world wars.

Germany lost its empire at Versailles after WW1, while Italian forays into Africa were successfully rebuffed. Western powers did little to check Japanese militaristic expansion from the late 19th century until the outbreak of World War Two (WW2) in Europe.

Imperialism and capitalism

Economists Utsa and Prabhat Patnaik argue that the primary accumulation of economic surplus – not involving the exploitation of free wage labour – was necessary for capitalism’s emergence.

Drawing on economic history, they clarify that primary accumulation has been crucial for capitalism’s ascendance.

Thus, imperialism was a condition for capitalism’s emergence and rapid early development. Ensuring continued imperial dominance has sustained capitalist accumulation since.

The 1910s and 1920s debates between the Second and Third Internationals of Social Democrats and allied movements in Europe and beyond involved contrasting positions on WW1 and imperialism.

For most of humanity in emerging nations, now termed developing countries, imperialism and capital accumulation did not ‘generalise’ the exploitation of free wage labour, spreading capitalist relations of production, as in ‘developed’ Western economies.

Due to capitalism’s uneven development worldwide, the Third International maintained the struggle against imperialism was foremost for the Global South or Third World of ‘emerging nations’, not the class struggle against capitalism, as in developed capitalist economies.

After decades of uneven international economic integration, including globalisation, the struggle against imperialism continues to be foremost a century later. Imperialism has reshaped colonial and now national economies but has also united the Global South, even if only in opposition to it.

Blinkers at Versailles

After observing the peace negotiations after WWI, John Maynard Keynes presciently criticised the terms of the Treaty of Versailles, warning of likely consequences. In The Economic Consequences of the Peace, he warned that its treatment of the defeated Germany would have dangerous consequences.

But Keynes failed to consider some of the Treaty’s other consequences. Newly Republican China had contributed the most troops to the Allied forces in WW1, as India did in WW2.

Germany was forced to surrender the Shantung peninsula, which it had dominated since before WW1. But instead of China’s significant contributions to the war effort being appreciated at Versailles with the peninsula’s return, Shantung was given to imperial Japan!

Unsurprisingly, the Versailles Treaty’s terms triggered the May Fourth movement against imperialism in China, culminating in the communist-led revolution that eventually took over most of China in October 1949.

Even today, popular culture, especially Western narratives, largely ignores the role and effects of war on these ‘coloured peoples’. By contrast, understating the Soviet contributions to and sacrifices in WW2 was probably primarily politically motivated.

Another counter-revolution

Franklin Delano Roosevelt was elected US president in 1932. He announced the New Deal in early 1933, years before Keynes published his General Theory in 1936.

Many policies have been introduced and implemented well before they were theorised. Unsurprisingly, it is often joked that economic theory rationalises actual economic conditions and policies already implemented.

Keynesian economic thinking inspired much economic policymaking before, during, and after WW2. Both Allied and Axis powers adopted various state-led policies. Keynesian economics remained influential worldwide until the 1960s and arguably to this day.

The counter-revolution against Keynesian economics from the late 1970s saw a parallel opposition movement against development economics, which had legitimised more pragmatic and unconventional policy thinking. From the 1980s, neoliberal economics spread with a vengeance and much encouragement from Washington, DC.

This Washington Consensus – the shared ‘neoliberal’ views of the US capital’s economic establishment, including its Treasury, the World Bank, and the International Monetary Fund – has since been replaced by brazenly ethno-nationalist ‘geoeconomic’ and ‘geopolitical’ responses to unipolar globalisation.

Related IPS Articles:

• Imperialism, Globalisation and Its Discontents*

• Africa Struggles with Neo-Colonialism

• Africa Taken for ‘Neo-Colonial’ Ride

• Ignorance-Inspired Brexit Imperial Nostalgia

• Globalization, Inequality, Convergence, Divergence

Available here online: Imperialism (Still) Rules

New Geopolitics Worse for Global South

By Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, Dec 17 2024 (IPS) - The new geopolitics after the first Cold War undermines peace, sustainability, and human development. Hegemonic priorities continue to threaten humanity’s well-being and prospects for progress.

End of first Cold War

The end of the first Cold War has been interpreted in various ways, most commonly as a US triumph. Francis Fukuyama famously proclaimed the ‘end of history’ with the victory of capitalism and liberal democracy.

With the collapse of the Soviet Union and allied regimes, the US seemed unchallenged and unchallengeable in the new ‘unipolar’ world. The influential US journal Foreign Affairs termed ensuing US foreign policy ‘sovereigntist’.

But the new order also triggered fresh discontent. Caricaturing cultural differences, Samuel Huntington blamed a ‘clash of civilisations’. His contrived cultural categories serve a new ‘divide-and-rule’ strategy.

Today’s geopolitics often associates geographic and cultural differences with supposed ideological, systemic and other political divides. Such purported fault lines have also fed ‘identity politics’.

The new Cold War is hot and bloody in parts of the world, sometimes spreading quickly. As bellicosity is increasingly normalised, hostilities have grown dangerously.

Economic liberalisation, including globalisation, has been unevenly reversed since the turn of the century. Meanwhile, financialization has undermined the real economy, especially industry.

The G20 finance ministers, representing the world’s twenty largest economies, including several from the Global South, began meeting after the 1997 Asian financial crisis.

The G20 began meeting at the heads of government level following the 2008 global financial crisis, which was seen as a G7 failure. However, the G20’s relevance has declined again as the North reasserted G7 centrality with the new Cold War.

NATO rules

The ostensible raison d’être of the North Atlantic Treaty Organization (NATO) has gone with the end of the first Cold War and the Soviet Union.

The faces of Western powers have also changed. For example, the G5 grew to become the G7 in 1976. US infatuation with the post-Soviet Russia of Boris Yeltsin and Vladimir Putin even brought it into the G8 for some years!

Following the illegal US invasion of Iraq in 2003, the sovereigntist Wolfowitz doctrine of 2007 redefined its foreign policy priorities to strengthen NATO and start a new Cold War. NATO mobilisation of Europe – behind the US against

Russia – now supports Israel targeting China, Iran and others.

Violating the UN Charter, the 2022 Russian invasion of eastern Ukraine united and strengthened NATO and Europe behind the US. Despite earlier tensions across the north Atlantic, Europe rallied behind Biden against Russia despite its high costs.

International law has also not stopped NATO expansion east to the Russian border. The US unilaterally defines new international norms, often ignoring others, even allies. But Trump’s re-election has raised ‘centrist’ European apprehensions.

Developing countries were often forced to take sides in the first Cold War, ostensibly waged on political and ideological grounds. With mixed economies now ubiquitous, the new Cold War is certainly not over capitalism.

Instead, rivalrous capitalist variants shape the new geoeconomics as state variations underlie geopolitics. Authoritarianism, communist parties and other liberal dirty words are often invoked for effect.

New Europe

Despite her controversial track record during her first term as the European Commission (EC) president, Ursula von der Leyen is now more powerful and belligerent in her second term.

She quickly replaced Joseph Borrell, her previous EC Vice President and High Representative in charge of international relations. Borrell described Europe as a garden that the Global South, the surrounding jungle, wants to invade.

For Borrell, Europe cannot wait for the jungle to invade. Instead, it must pre-emptively attack the jungle to contain the threat. Since the first Cold War, NATO has made more, mainly illegal military interventions, increasingly outside Europe!

The US, UK, German, French and Australian navies are now in the South China Sea despite the 1973 ASEAN (Association of South-East Asian Nations) commitment to a ZOPFAN (zone of peace, freedom and neutrality) and no request from any government in the region.

Cold War nostalgia

The first Cold War also saw bloody wars involving alleged ‘proxies’ in southwestern Africa, Central America, and elsewhere. Yet, despite often severe Cold War hostilities, there were also rare instances of cooperation.

In 1979, the Soviet Union challenged the US to eradicate smallpox within a decade. US President Jimmy Carter accepted the challenge. In less than ten years, smallpox was eradicated worldwide, underscoring the benefits of cooperation.

Official development assistance (ODA) currently amounts to around 0.3% of rich countries’ national incomes. This is less than half the 0.7% promised by wealthy nations at the UN in 1970.

The end of the first Cold War led to ODA cuts. Levels now are below those after Thatcher and Reagan were in power in the 1980s. Trump’s views and famed ‘transactional approach’ to international relations are expected to cut aid further.

The economic case against the second Cold War is clear. Instead of devoting more to sustainable development, scarce resources go to military spending and related ‘strategic’ priorities.

Related IPS Articles:

• The Global South in the New Cold War

• South Suffering Due to Powerful Nations’ Policies

• IMF Urges Non-alignment in Second Cold War

• Imperialism, Globalisation and Its Discontents*

• North Ignores ‘Perfect Storm’ in Global South

• Aid for Power in New Cold War

• Weaponizing Free Trade Agreements

Available online here: New Geopolitics Worse for Global South

2021: Year of living dangerously?

Jomo Kwame Sundaram

KUALA LUMPUR: Goodbye 2020, but unfortunately, not good riddance, as we all have to live with its legacy. It has been a disastrous year for much of the world for various reasons, Elizabeth II’s annus horribilis. The crisis has exposed previously unacknowledged realities, including frailties and vulnerabilities.

For many countries, the tragedy is all the greater as some leaders had set national aspirations for 2020, suggested by the number’s association with perfect vision. But their failures are no reason to reject national projects. As Helen Keller, the deaf and blind author activist, noted a century ago, “The only thing worse than being blind is having sight, but no vision.”

After JFK’s assassination in November 1963 ended US opposition to Western intervention in Indonesia, President Sukarno warned his nation in August 1964 that it would be ‘living dangerously’,vivere pericoloso, in the year ahead. A year later, a bloody Western-backed military coup had deposed him, taking up to a million lives, with many more ruined.

Further economic slowdown

Lacklustre economic growth after the 2009 Great Recession has been worsened in recent years by growing international tensions largely associated with US-China relations, Brexit and slowing US and world growth although stock markets continued to bubble.

Economic growth has slowed unevenly, with Asia slowing less than Europe, Latin America and even the US. With effective early pre-emptive measures, much of East Asia began to recover before mid-2020. Meanwhile, most other economies slowed, although some picked up later, thanks to successful initial contagion containment as well as adequate relief and recovery measures.

International trade has been picking up rapidly, accelerating rebounds in heavily trading economies. Commodity prices, except for fossil fuels, have largely recovered, perhaps due to major financial investments by investment banks and hedge funds, buoying stock and commodity prices since late March.

Very low US, EU and Japanese interest rates have thus sustained asset market bubbles. Meanwhile, new arbitrage opportunities, largely involving emerging market economies, have strengthened developing countries’ foreign reserves and exchange rates, thus mitigating external debt burdens.

Unbiased virus, biased responses

The pandemic worsened poverty, hunger and vulnerability by squeezing jobs, livelihoods and earnings of hundreds of millions of families. As economic activities resumed, production, distribution and supply barriers, constrained fiscal means, reduced demand, debt, unemployment, as well as reduced and uncertain incomes and spending have become more pronounced.

While many governments initially provided some relief, these have generally been more modest and temporary in developing countries. Past budget deficits, debt, tax incentives and the need for good credit ratings have all been invoked to justify spending cuts and fiscal consolidation.

Meanwhile, pandemic relief funds have been abused by corporations, typically at the expense of less influential victims with more modest, vulnerable and precarious livelihoods. Many of the super-rich got even richer, with the US’s 651 billionaires making over US$1 trillion.

On the pretext of saving or making jobs, existing social, including job protection has been eroded. But despite hopes raised by vaccine development, the crisis is still far from over.

Don’t cry for me, says Argentina

Meanwhile, intellectual property blocks more affordable production for all. Pharmaceutical companies insist that without the exhorbitant monopoly profits from intellectual property, needed tests, treatments and vaccines would never be developed. Meanwhile, a proposed patent waiver for Covid-19 vaccines has been blocked by the US and its rich allies at the World Trade Organization (WTO).

Hence, mass vaccination is likely to be very uneven and limited by intellectual property, national strategic considerations (‘vaccine nationalism’), prohibitive costs, fiscal and other constraints. Already, the rich have booked up almost all early vaccine supplies.

The main challenge then is fiscal. Economic slowdowns have reduced tax revenues, requiring more domestic debt to increase spending needed to ensure the recessions do not become protracted depressions. Meanwhile, rising debt-to-GDP ratios and increased foreign debt have long constrained bolder fiscal efforts.

But despite the urgent need for more fiscal resources, we are told that if the richest are required to pay more taxes, even on windfall profits, they will have no incentive to ‘save’ the rest of us. Nevertheless, new wealth taxes have just passed in Argentina.

This time is different

As the pandemic economic impacts began to loom large, International Monetary Fund Managing Director Kristalina Georgieva quickly offered debt relief for low-income countries on terms much better than the G20’s miserly proposal.

Unlike well-meaning debt-fixated researchers and campaigners, even new World Bank chief economist, erstwhile debt hawk Carmen Reinhart has urged, “First you worry about fighting the war, then you figure out how to pay for it”.

Nobel laureate Amartya Sen is concerned that “in the policies against the present pandemic, equity has not been a particularly noticeable priority… Instead, the focus has been on drastic control and sudden lockdowns…with little attention paid to labourers who lose their jobs or the many migrant workers, the poorest of the poor, who are kept hundreds of miles from their homes”.

COVID-19 may still bring major reforms, such as Roosevelt’s New Deal response to the Great Depression. But now, it seems likely to usher in a world where insecurity and unpredictability define the new normal. While professing to protect victims’ interests, ethno-populism blames ‘Others’ as the enemy responsible.

Still, many hope for a silver lining. Sen suggests that “a better society can emerge from the lockdowns”, as happened after World War Two, with greater welfare state provisioning and labour protections in much of the West and agrarian reforms in East Asia. But there is nothing to guarantee a better ‘new normal’.

Beyond neoliberalism?

For many, Joe Biden’s election to succeed Trump is being celebrated as a resurgent triumph for neoliberalism, enabling the US and the rest of the world to return to ‘business as usual’.

Incredibly, another Nobel laureate Michael Spence has even called for structural adjustment programme conditionalities for countries seeking help from the Bank and Fund, repudiating the Bank’s Growth Commission he once chaired, i.e., which found that seemingly fair, often well-intentioned conditionalities had resulted in “lost decades” of development.

But thankfully, there is widespread recognition that all is not well in the world neoliberalism and Western dominance created. Incredibly, Klaus Schwab, transnational capitalism’s high priest, has conceded, “the neoliberalist … approach centers on the notion that the market knows best, that the ‘business of business is business’...Those dogmatic beliefs have proved wrong”.

Instead, he advised, “We must move on from neoliberalism in the post-COVID era”, recognising: “Free-market fundamentalism has eroded worker rights and economic security, triggered a deregulatory race to the bottom and ruinous tax competition, and enabled the emergence of massive new global monopolies. Trade, taxation, and competition rules that reflect decades of neoliberal influence will now have to be revised”.

Will we ever learn?

The philosopher Santayana once warned, “Those who cannot remember the past are condemned to repeat it.” Hegel had observed earlier that history repeats itself, to which Marx added, “the first time as tragedy, the second time as farce”. Nevertheless, hope remains an incurable disease that keeps us all striving and struggling.

As FDR reminded his supporters, no progressive policies will come about simply by relying on the goodwill of those in authority. Instead, they will only be enacted and implemented thanks to popular pressure from below. As Ben Phillips has put it, “the story of 2021 has not yet been written: we can write it; we can right it”.