By Barry Sheppard, June 18, 2014
The following are two notes by Barry Sheppard responding to readers of his essay, ‘Three Theories of the Soviet Union‘. That essay first appeared on the website Links International Journal of Socialist Renewal, June 6, 2014. It can also be found on the website ‘A Socialist in Canada’ in its sections ‘Marxism’ and ‘Ukraine: translation and articles by other authors’.
My article, ‘The Russia as ‘imperialist’ thesis is wrong and a barrier to solidarity with the Ukrainian and Russian people‘ was published on June 18, 2014 in Truthout and in Links. It can be found HERE.
A Third Camp position need not be one of “neutrality” between the belligerent powers. I have always thought of my own Third Camp position as being one of opposition to both imperialist camps. Once this position is taken up, different tasks devolve upon the working class in the various countries, depending on whether the country in question is an imperialist one or an oppressed one.
It should also be noted that, because the USSR had a Stalinist economy and not a capitalist one, Russian was imperialist at that time in the ancient Roman sense rather than the modern Leninist sense. The phenomena were identical on the battlefield and quite similar for the subject peoples, but were driven by different dynamics.”
The writer says that in his version of the third camp position, it “need not be one of ‘neutrality’ “ and that “different tasks devolve upon the working class in the various countries, depending on whether the country in question is an imperialist one or an oppressed one.”
As I explained, in the Korean War, those held either third camp view were neutral in the U.S. invasion of Korea and the war against the North and the Chinese army. In the U.S. organized Bay of Pigs invasion of Cuba, and the Cuban missile crisis, the third camp was also neutral. From what the writer says, he wouldn’t have agreed with the third camp organizations of the time.
I also noted that while the third camp organizations were initially neutral in the U.S. war against Vietnam, by 1968 they had changed their position to be opposed to the U.S. This positive change, and the subsequent positions taken regarding imperialist wars and threats against oppressed nations, defending the oppressed nations, are consonant with the writer’s position. I did note that often this positive position is honored more formally than in practice.
The writer also says that “Russia [I assume he means the USSR, China, etc.] was imperialist… in the ancient Roman sense rather than the modern Leninist sense. The phenomena were identical on the battlefield and quite similar for the subject peoples, but were driven by different dynamics.”
I won’t repeat what I wrote refuting Draper on this point. But the idea that in a world dominated by capitalist imperialism (the twentieth century) anything remotely similar to Roman imperialism could not have existed. It would have been utterly and quickly crushed by capitalist imperialism if it had.
The phenomena of modern capitalist imperialism are not at all “identical” to previous imperialisms.
Lenin took up this idea of mushing together of previous imperialisms and modern capitalist imperialism, because it was raised in his time. In his pamphlet “Imperialism, the Highest Stage of Capitalism”:
“Colonial policy and imperialism existed before this latest stage of capitalism, and even before capitalism. Rome, founded on slavery, pursued colonial policy and achieved imperialism. But ‘general’ arguments about imperialism, which ignore, or put into the background the fundamental difference of social-economic systems, inevitably degenerate into absolutely empty banalities, or into grandiloquent comparisons like ‘Greater Rome and Greater Britain.’ Even the colonial policy of capitalism in its previous stages is essentially different from the colonial policy of finance capital.”
There is another question that the writer doesn’t take up, which is whether Russia and China are imperialist today, which is asserted by many who come from the third camp tradition. It should be noted that everyone agrees that Russia and China are capitalist today, so if they are imperialist they must be so in the Leninist sense.
On a different list, Peter S. challenges my assertion that Russia and China are not imperialist. Peter writes:
“I see Russia as imperialist because it meets the Leninist criteria. Its economy is developed enough so that monopoly capital dominates, industrial and banking capital have merged into finance capital, it has a financial oligarchy, it exports capital, as well as goods, on a large
scale, it participates in the economic partition of the world, and it participates in the political and military partition of the world when economic measures are not enough.
“China has all these characteristics too, but I’d hesitate to use the term imperialist because so much of the economy is so backward. Perhaps nascent imperialism. There’s nothing standing in the way of China’s becoming an imperialist power except workers’ revolution, if that occurs soon enough. US imperialism cannot block it. China contrasts with India in this regard. The remnants of state control of the economy in China prevent the subordination of the country to imperialism, as is the case with India.”
Peter is in agreement with me that in the USSR (including Russia) before the capitalist restoration, there was very little money capital. He also agrees that in the transition, there was not the pre-existing money capital to buy the newly privatized means of production, which were privatized by what amounted to theft, “gangster capitalism.”
Of course, in the subsequent 25 years, capitalism has developed in Russia. Billionaires have arisen. But exactly when did finance capital arise in Russia? Did it take five years to go from zero? Ten years? Has it recently happened after twenty-five years?
Contrary to Peter, I agree with Trotsky’s assertion that if capitalism was restored in the USSR, it would be a very weak capitalism, open to imperialist penetration. That’s what exists today in Russia.
While there are large firms inherited from the USSR, these are not dominated by finance capital.
The development of finance capital, the merging of banking and industrial capital in ordinary capitalism took a long time. If this happened in Russia in five or even twenty-five years, that would have been quite extraordinary. Especially given the overwhelming economic dominance of the U.S.-led already existing imperialist system.
The same question can be asked regarding China. I note that Peter hesitates to say that China is imperialist “because so much of the economy is so backward.” That should give one pause, but is not the main reason why China is not imperialist.
The question is not whether some financial capital has come into existence, or whether Russia or China exports some capital as well as goods. The difference between imperialist countries and exploited countries is the relative weight of these things.
If Russia were imperialist today, we would expect Russian banks to be increasingly prominent in the world, since the great universal banks are the most important organizations of finance capital. The publication Global Finance lists the world’s 50 biggest banks as of 2012 in terms of assets. Despite the size and natural wealth of Russia, not a single Russian bank appears on the list. Neither does any Chinese bank.
According to the Wall Street Journal of January 31 this year, of the world’s 100 biggest banks in terms of assets, only two Russian banks appear, Sherbank and VTB, coming in at 54 and 94 respectively. Sherbank evolved from the old Soviet savings bank. Even today 51 percent of its stock is owned by the Russian central bank. The Russian Federation owns 60.9 percent of VTB. Private capital owns the rest.
In and of itself, the lack of a single Russian bank in the top 50 banks and only two in the top 100, is suggestive of the relative position of Russia to world imperialism.
The Credit Suisse Global Wealth Datebook 2012 divides the countries of the world into four categories according to wealth – not income – per adult. This is a rough proxy for the average amount of financial capital that is owned by individuals in each country, since finance capital – stocks, bonds, money market funds and bank accounts – form the great bulk of wealth in today’s world.
The top group, with over $100.000 average wealth per adult, pretty much defines the traditional imperialist countries. These countries are the United States, Canada, all the countries of Western Europe with the exception of Portugal but none of the East Europe countries. Australia, New Zealand, Japan, Iceland, Finland, Norway, Sweden and Israel (which has become imperialist) are also in this top group.
A few countries in this $100,000 plus club don’t fit in the traditional list of imperialist countries. Leaving aside some Arab oil monarchies, which are a special case of non-imperialist countries, there is Taiwan and Ireland. South Korea does not belong to this top group.
The second group have an average wealth level of between $25,000 and $100,000. In this group we find Mexico, Colombia, Chile, Uruguay, Saudi Arabia, the Czech Republic, Slovakia, Slovenia, the Baltic states, Greece, Turkey, Portugal, and a few other Arab oil monarchies. Perhaps only Portugal, which had a colonial empire in Africa until the 1970s might be considered imperialist.
The third group of countries, very poor in finance capital, includes Brazil, Argentina and most of the other Latin American countries; the countries of North Africa; most of Eastern Europe including Poland and Russia; China and Indonesia.
Although Russia and China are in this third group, I doubt that Peter thinks the other countries in this tier are imperialist. Neither is Russia or China.
The fourth tier are the very poorest in finance capital. These include the countries of Central Africa, India, Vietnam, Bolivia and Guyana in South America, and Ukraine. Though Ukraine was among the richest areas of the Soviet Union, it is now among the poorest in finance capital.
Western economic sanctions could put a teetering Russia into the fourth tier.
These rankings are reflections of the extent of finance capital, not of industrial production, standard of living, etc.
What about export of capital? It is true that both Russia and China have greatly increased their foreign direct investment in other countries. The United Nations Conference on Trade and Development lists China’s FDI for 2012 at about $510 billion, and Russia’s at $413 billion. Both are eclipsed by Italy and Spain, are less than half of the Netherlands and Switzerland, under one-third of the UK – in spite of being much larger than these countries. The figures for the US are 10 times higher and growing.
And today, even quite backward countries export capital. For example, Thailand’s outward FDI was $460 billion in 2011.
The question again, is not the mere fact of export of capital, but the relative weight compared to the real imperialist countries.
The overwhelming superiority of finance capital in the “traditional” imperialist countries relative to the finance capital of Russia and China means that in the capitalist world market the greater monopoly and financial power of the former sets the terms and prices of trade resulting in unequal trade that economically exploits the latter.
Unequal trade is also a consequence of the greater labor productivity in the imperialist centers.
The imperialist centers exploit Russia and China through other means, too. These centers, first of all the U.S., do this through their control of the world’s financial system, direct investment, and general economic dominance.
Hasn’t globalization resulted a “flat earth” as Thomas Friedman foolishly said? The fact that much manufacturing has been moved to China from the U.S. and other imperialist countries doesn’t mean that China is gaining at the expense of, e.g., the U.S. The imperialist centers, above all the U.S., develop and control high technology. Apple’s iPhones, for example are based on its technology. It’s subsidiary factories in China import high tech components from Apple, which are assembled by low wage workers, and then the finished product is exported to Apple, which controls the sales and distribution. In 2010, Apple imported iPhones for $179 from China, which already includes the prices of the components Apple sold its subsidiaries, and then sold them $600 on the US retail market. Such a markup would be impossible if the Chinese subsidiaries or Chinese capital controlled the high-tech aspects of production. IPhone exports from China to the US in 2009 were $2 billion. Of this, only $73 million went to Apple’s Chinese subsidiaries.
Doesn’t China’s massive holdings of U.S. debt indicate it is imperialist, as some claim? Actually it proves the opposite, China’s relative weakness. Given that this debt is held in dollar terms at virtually zero interest, with every fall of the dollar relative to the yuan China’s holdings lose value. China buys US debt as mere insurance against speculators. It does this because it is locked out of the most profitable activities by the established (real imperialist) multi-national corporations. If China were imperialist, it would use its enormous dollar surplus to buy the best and most advanced capital equipment, technologies and personnel in at least some sectors and start challenging real imperialism in those sectors. Instead, it seeks to protect the value of its dollars as much as it can by buying US debt at zero, below zero or in the best of cases very low returns, not investing in this way. If interest rates rise on U.S. Treasury bonds in the
future, this will be roughly offset by inflation of the dollar.
There have been important changes since Lenin (and many others along the same lines) wrote about imperialism. (I’m in this reply not taking up the massive colonial revolution and the blows it has dealt to imperialism, and most certainly will do again.) In 1914, the modern imperialism characterized by finance capital etc. was still intermixed with the imperialism of an earlier epoch. This was most evident in Czarist Russia, and it also characterized the Austro-Hungarian Empire.
The world had been carved up by the imperialist powers. Their rivalry and conflict led to the First World War. Out of that war came the collapse of the Hapsburg Empire, and the overthrow of Czarism and then capitalism in Russia. Imperialism as the highest stage of capitalism remained and developed outside of the USSR. This led to the Second World War. On the imperialist side, the main victor, over allied and axis imperialisms both, was U.S. imperialism.
In place of the intense inter-imperialist rivalries that led to the two World Wars, a new situation emerged, with the US as the unchallenged military and economic hegemony over the other imperialist powers. The US also moved to the center of technology in the introduction of semi-automated production and then the widespread computerization. It is no accident that NSA’s computer spy capability dwarfs all others. The US’s technological power is a result of its huge economic resources exemplified by its preponderance of finance capital.
The other core imperialist powers became U.S. vassals, still imperialist but subordinate to the US. A system of military and other alliances and treaties formalized this reality. With the collapse of the USSR and the reintroduction of capitalism in China (but not the old landlordism that the Chinese revolution destroyed) the US-dominated system has sought to penetrate the former Soviet bloc with important success, bringing into NATO many East Europe countries, including non-imperialist ones. That is the meaning of the drive to absorb Ukraine into the European Union and if possible, NATO. A longer goal is to subordinate capitalist but non-imperialist Russia. Russia is resisting.
Imperialist economic penetration into China has occurred, of the type described. Obama’s “Shift to Asia” is designed to push further into the region.
This U.S.-dominated imperialist system may be upset in the future, due to uneven and combined development, but it is what we have in 2014.
Peter says that Russia’s imperialist character is also shown, in addition to what I’ve already discussed, by its participation in the “economic partition of the world, and it participates in the political and military partition of the world when economic measures are not enough.”
Trying to make its own trading blocs is not evidence of imperialism. Are the trading blocs being made in Latin America and the Caribbean to gain some space from imperialism evidence that these countries are imperialist?
That Russia is trying to militarily rearrange the world in the face of the overwhelming military might of the US, which is more powerful than the militaries of all the rest of the world together, including Russia and China, is a fantasy. Russia and China have nuclear weapons, which has prevented all out war by the US against them, but this doesn’t constitute trying to militarily rearrange the world. The annexation of Crimea by Russia to keep its naval base out of NATO’s hands and the skirmishes with Georgia hardly amount to that.