Introduction
in Imperialism and the development myth

Contrary to celebrations of China’s ‘rise’ or ‘the rise of the rest’, imperialism of the rich countries is alive and well. China does not threaten the global dominance of the imperialist states and it cannot within the global capitalist system. In contemporary capitalism, domination over the most sophisticated parts within the overall labour process would be the only path to ‘catch up’ with the rich societies. However, imperialist monopoly capital dominates the highest aspects of the labour process, so that other, ‘non-monopoly’ capital must specialise in low-end and ordinary labour. This kernel within the international division of labour leads to the development of two poles – a pole of high-end labour and its opposite, a pole of low-end, ordinary labour. Capitalist producers and countries are divided on this basis into rich, monopoly and poor, non-monopoly capitals and countries. For large non-monopoly societies – that is, large ‘Third World’ states – the path to ‘catch-up’ is closed. The nature of Chinese and other Third World participation in the global division of labour does not prepare them to challenge imperialist monopoly. China’s rapid expansion of production has profoundly reshaped the world economy, however, this does not indicate China is catching up with imperialist countries. China has caught up with the other large Third World economies, like Brazil and Mexico, but these occupy an intermediate position within the international division of labour. They have a high level of development compared to poorer Third World societies, but far below that of the imperialist core societies.

Contrary to the celebration and fear of the rise of China, ‘the rise of the rest’ and other apparent ascendancies, this book argues that the imperialism of the rich countries is alive and well. China does not threaten the global dominance of the rich countries and it cannot while under the global capitalist system – far from it. Indeed, China remains a poor country – with low per capita income and wealth – and is being held in that position by the scientific and productive monopolies of the rich countries. This is the essence of the imperialist stranglehold on China.

The same stranglehold grips not only China but almost every country in Asia, Africa and South America. The whole of what used to be called the ‘Third World’ – a term we are told is no longer relevant – is still poor and exploited. Despite carrying out a growing part of the world’s work, the poor countries are not breaking free of imperialist domination. Nor do any of them, including China, threaten to topple, replace, outcompete or overtake the imperialist states. This book explains how the rich, imperialist countries are able to maintain their dominance decade after decade and why this situation will continue as long as the present system remains in place.

For years, to make such statements has invited not only ridicule but incomprehension. China’s supposed threat to the imperialist countries appears so obvious to almost everyone. Most discussion is not about if China can catch up, but how long it might take, or what it will look like. This view is held by the huge majority of working people, scholars and intellectuals, including many on the Left. Callinicos expressed the dominant view when he said, ‘One has only to utter the word “China” to indicate what’s wrong with the Third Worldist understanding of imperialism’.1 What he suggests is that China debunks the idea the world is divided into rich, imperialist and poor, exploited countries; that we should abandon such views, which are symbolised by the term ‘Third World’.

Until recently, another popular talking point – the rise of the ‘BRICS’ countries (Brazil, Russia, India, China and South Africa) – was also supposed to debunk the ‘Third Worldist’ view that the world is divided between rich and poor countries. Yet this has already fallen out of fashion. The imagined rise of BRICS is now obviously false as all the others, besides China, are widely acknowledged as facing deep economic crises. But no rethink of what caused so many unrealistic expectations about their development is taking place. Without a rethink, it is hard to see how the outlook will change. The same thinking is still being applied to China.

Today a small core of rich countries – largely the same states as a hundred years ago – still dominate the international economy, securing the lion’s share of total world income. It is easy to identify them because they are many, many times richer than all the other major societies. They are home to just 13 per cent of the world’s people. These are the imperialist countries. Like a hundred years ago, the imperialist countries are principally Western Europe, North America and Japan – plus Australia and New Zealand. We can now add Israel, South Korea and Taiwan.

The world has become ever more polarised – especially since the collapse of the Soviet Union. The polarisation is between this small group of imperialist countries and the vast majority of countries that make up the ‘Third World’. Today there is almost no middle ground or ‘Second World’ between the rich and poor states. China is exemplary of this pattern. China remains a poor country with per capita income less than 20 per cent of the imperialist states (see Chapter 1). This book shows that is where it and other countries will remain, so long as the world remains capitalist.

Readers who are old enough may find parts of the contemporary China hype sounds familiar. In the 1960s – long before anyone started talking about BRICS – it was claimed that Brazil was approaching something then called economic ‘take-off’, which would launch it into the orbit of the developed, imperialist states.2 These expectations were disappointed. Brazil today languishes in the same position within the world hierarchy as it did six decades ago. It is still a relatively well-developed Third World state, richer than the worst off, but vastly poorer than the imperialist societies. Brazil’s per capita income remains essentially unchanged relative to the imperialist world – just 19 per cent of the average imperialist country’s per capita income.

The hype around the threat of competition from this or that Third World country that is ‘catching up’ or poised to ‘overtake’ imperialist countries is part of the propaganda offensives of the capitalist classes within the imperialist societies. Capitalists cutting wages or replacing workers with machines in such countries find it convenient to point their finger at competition from alien states and peoples as the cause. The foreign threat is exaggerated to make attacks on workers appear necessary, inevitable and not the fault or responsibility of the capital that actually carries them out. Denigrating these countries as failed states inhabited by inferior or threatening peoples and regimes is a part of making this sales pitch easier. This book focuses on critiquing the economic hype associated with this propaganda.

The real and imagined threat of Chinese economic competition has proven every bit as useful as the war on terror as a rallying cry for national chauvinism and racism in the post-Cold War world. It has greatly assisted US capitalists and capitalists in other rich countries to justify attacks on living conditions of working people in their own countries – necessary to safeguard capitalist profitability in the neoliberal period. The propaganda offensive against China is helped endlessly by the fact that large sections of the Left, including Marxists, have swallowed it whole. For example, US socialists like Ashley Smith argue that China is ‘a new imperial power’.3

If China really was a threat to the world dominance of the United States and other imperialist societies, when US capitalists or their political representatives told workers they need to accept job losses and pay cuts due to overwhelming Chinese competition, this would have some basis. In reality it is marginal US producers that are seriously threatened by Chinese competition. Other companies have taken advantage of cheap Chinese labour to reduce their costs and increase their profits. For them the China threat provided a perfect cover.

We know large parts of the US working class have accepted these arguments and do view China as a threat, given their support for Trump’s racist programme to ‘Make America Great Again’ or alternative America first programmes promoted by Biden, Sanders and others. The same situation exists in Europe, Australia and all the major imperialist states.

China cannot be a threat to the imperialist countries so long as it remains a second-tier economy that is subjugated and exploited by the imperialist ruling classes, backed by the national governments they control. It is also the reason why key imperialist propaganda outlets – like the New York Times, Washington Post, Australian ABC and seemingly every mainstream political party and major news outlet across the imperialist world – work so hard to convince us of the so-called threat.

On the other hand, continuing imperialist exploitation of China and other poor countries is also a powerful social basis for racism among working people. The imperialist system, as it stands, delivers wages in all the rich countries that are five or ten times higher than China and the rest of the Third World. Without doubt this is a powerful reason – or bribe – for workers to accept the current system, to support it, or at least not oppose it actively. Outsourcing of the most dangerous and environmentally destructive processes provides an additional benefit. Principally this goes to First World capital, but also it benefits the imperialist societies as a whole. This too is a powerful basis for acquiescence or passivity.

The global rich–poor divide is a financial confirmation that the peoples of First and Third World are not treated as equals – some are deemed by the system to be more deserving of a better life style than others. The divide will remain the principal basis of racism and national chauvinism unless working people can be convinced of an anti-imperialist perspective. For that to be possible we need to have a clear understanding of what the imperialist system is and how it fundamentally operates. The starting point is confronting the false narrative that the imperialist countries are collapsing under the weight of Chinese competition. They are not. If there is a threat of collapse it stems from internal contradictions of the whole system that is increasingly unable to secure dignified living conditions and a safe and sustainable environment for working people wherever they live.

An analysis of the considerable growth and development of the Chinese economy takes up a good part of this book. This growth and development is shown to be completely different to how it is presented in the imperialist propaganda and to what most people think. To understand China – the largest Third World society – we need to also understand its relationship to the imperialist societies, as well as to other poor countries. That is, we need an understanding of the worldwide imperialist system that we live in – the aim of this book.

China’s underlying weakness, and that of all Third World states, is that its growth (including during the neoliberal period) is of a type of capitalist development that is qualitatively inferior to that which occurs in the imperialist societies. It is different to the type of development that would be necessary for China to compete with imperialism’s most essential strength – its domination of the global labour process.

In contemporary capitalism – imperialism – domination at the highest levels of the labour process – that is, in the most complex, sophisticated and difficult types of labour – is the only path to ‘catch up’ with the high-income societies because such domination is, in turn, the basis of their domination of the world economy.

Imperialist monopoly capital dominates the highest aspects of the labour process, so that non-monopoly capital is relegated to the lowest level or ordinary levels of the labour process. This fact is the kernel of the development of an international division of labour as it now exists. On that basis we can see the development of two poles within the global division of labour – a pole of high-end labour and its opposite, a pole of low-end, ordinary labour.

Capitalist producers and countries are both divided and polarised on this basis. Some capitalists, primarily those based in the imperialist countries, produce commodities4 under conditions reflecting their dominance of the technologically highest, most complex and productive production processes. These are the monopoly capitalists.

Other capitalists, primarily based in the Third World countries, produce commodities under conditions reflecting their very limited access to technologically complex and productive processes and as a consequence, are restricted to mostly more simple production processes – even if these are sometimes carried out on a massive scale. These are the non-monopoly capitalists. Monopoly capital dominates in the small handful of imperialist countries; non-monopoly capital operates everywhere else.

The book also shows that the path to transform themselves into a new group of monopolists is decisively closed off to the capitalist class of any large Third World society – including the largest one. The nature of Chinese and other Third World participation in the world market does not prepare them for or tend towards challenging the essential imperialist monopoly. Indeed, the polarised nature of the world division of labour ensures the opposite is true, that Third World participation in the global labour process is mostly restricted to simple low-end tasks, with only minor exceptions. Without being able to challenge imperialist monopoly over the labour process, no broader challenge is possible.

What China has achieved in the neoliberal period is highly significant. It is crucial to understand what has happened more precisely. China’s rapid production growth and exports have reshaped the world economy. However, this does not mean that China is catching up with imperialist countries. China has achieved catch-up, more or less, with the other large Third World economies, like Brazil and Mexico. These countries and some others, together with China, occupy an intermediate position within the international division of labour. They are characterised by a relatively high level of development compared to other, poorer Third World societies, but far below the level of development of the imperialist societies. They are the most successful capitals only at the specific aspects of the global labour process that are allocated to the Third World. They are the most successful Third World societies at carrying out standard, or ‘ordinary’, non-monopoly labour processes.

Being the best at non-monopoly labour processes sets this group apart from other Third World societies, but it does not mean they are anywhere near being able to catch up and overtake the economies of the imperialist countries. They may be able to offer some resistance to the worst excesses of imperialist economic aggression for periods of time, but they are not in a position to threaten monopoly capital’s dominant position at the apex of the global economy. They will continue to be the object of economic aggression and exploitation. Imperialist societies are characterised by the monopoly of the opposite type of labour processes – highest and high-end labour. Monopoly over high-end labour is the only type of monopoly possible based on the labour process itself. It is very difficult to establish a sustainable monopoly over something that is relatively easy to duplicate (i.e. ordinary, low-end labour processes).

During the neoliberal period, the shift of low-end production to the Third World has not and is not bringing about a convergence in the income, wealth or social and economic development between rich and poor countries. Rather, the huge gap between the small club of imperialist states and the vast majority of poor states has persisted and grown, even as the Third World has contributed an increasing share of global labour.

The neoliberal period also witnessed the defeat and decline of most Third World national liberation movements of various types. Their defeat, alongside the collapse of the Soviet Union, were critical factors that enabled capitalist imperialism to develop new forms – later dubbed neoliberalism – which allowed it to emerge from the crisis of the 1970s and early 1980s.

With the decline of the Third World mass, anti-imperialist struggle, came also a decline of the anti-imperialist intellectual work that characterised earlier periods. This decline in anti-imperialist thought and action affected not only the important intellectual currents often collectively referred to as ‘dependency theory’ but also affected the overlapping field of Marxist writing on imperialism. For the three decades, 1980–2011, new work on the economics of imperialism virtually ceased among First World Marxist academics. Marxists belonging to activist groups and parties in the rich, English-speaking world hardly fared better. Today the empirical fact of global income and social polarisation between rich and poor countries is – with notable exceptions – hardly acknowledged or discussed by many First World Marxists.

Theoretically the decline of Marxist work on imperialism occurred alongside widespread rejection, especially by scholars, of Lenin’s famous book Imperialism: The Highest Stage of Capitalism. As little new work was being written, rejection of Lenin was often based on little or no discussion of the book itself besides shorthand reference or caricature. The few works that did attempt to explain the contemporary imperialist world economy have not developed any well-known Marxist theory that can account for the dynamics seen in the neoliberal period.

Yet Lenin’s Imperialism – and in particular its key concept, monopoly finance capital – appears to provide a usable framework. This book argues that contemporary world polarisation into rich and poor societies is based upon imperialism’s monopolistic dominance in the labour process. This is not an original insight. Monopolisation of technical supremacy and thus of labour productivity are given great emphasis by Lenin – something long overlooked. This contrasts with contemporary explanations that tend to emphasise factors other than the labour process itself – such as military strength, institutional power, finance or price distortions.

By focusing on the labour process and the ways in which imperialist monopoly intersects with the labour process, Lenin’s theory also allows us to outline the specific manner in which Marx’s labour theory of value can be applied to the conditions of contemporary monopoly capitalism (a Marxist theory of unequal exchange). This Leninist application of Marx’s economic theory provides a framework that allows the book to develop a simple, clear and empirically verifiable explanation of the economic core of contemporary imperialism.

In this labour conception of imperialism, the role of the imperialist state is also extended beyond those roles for which it is commonly noted: developing and enforcing laws, supressing workers, going to war or giving financial assistance to capital. In addition to these, the imperialist state is intimately involved in raising labour productivity. Capitalist firms are little able to independently carry out the broad social policies required to create highest labour productivity and find themselves fundamentally dependent for this on the imperialist state.

The key theoretical insight of this book – the development of the concept of non-monopoly capital – is shown to be a necessary component and theoretical extension of Lenin’s broader theory of monopoly finance capital. Many contemporary heterodox researchers and mainstream press reports, at least when taken together, confirm the existence of monopoly and non-monopoly capital as well as the uneven and exploitative relationship between them. Researchers, like Steinfeld, Schwartz and many of the world-systems writers cannot help but describe the exploitative relationship between ‘global lead firms’ and Third World capital (even if they do not always call it this), nor fail to notice that the essential basis of this dominance is technological superiority. However, much of the research, conforming to mainstream views on development, tends to view exploitative relationships as temporary or incidental, and not systemic.

The significance of Lenin’s work is that it gives the most useful and accurate definition of monopoly. First, Lenin’s concept of monopoly is based in the labour process itself. Second, it remains inherently capitalist in character. He therefore emphasises privately owned production of commodities for the market. What this means is that the market establishes the arena where competition for technological and labour process supremacy is fought. As the widespread privatisations and ‘free market’ reforms of the neoliberal period testify, this appears to have been correct. Building on this basic Marxist definition, the rest of this book shows how imperialism’s labour process monopoly constitutes the basis of its domination, exploitation and – under capitalism – its permanence.

In the conditions of capitalist imperialism, Third World societies developing new technologies – even where this is possible – is not sufficient on its own. To challenge imperialist dominance would require developing new technologies for the production of commodities sold on the capitalist world market. Therefore, it requires developing new technologies that can defeat the belligerent competition of incumbent technological leaders on the market – something entirely different to the incremental learning and improvement envisaged by multilateral development institutions such as the World Bank.

In monopolistic competition for control of markets, it is not enough to make certain advances and to achieve marginal improvements. This may be adequate for progress relative to other non-monopoly capital, or to gain a minor improvement in bargaining position relative to monopoly capital. It results only in marginal and temporary gains. To ‘catch up’ in monopolistic competition (i.e. to approach or equal the level of the advanced economies) would mean decisively breaking the stranglehold of the leading multinational corporations (MNCs) and do so while being at the same time attacked by them and by imperialist states. Imperialism’s stranglehold can be broken only by decisively surpassing it technologically, by defeating the incumbent monopolies and replacing the imperialist societies as the driver of world development.

Incumbent imperialist monopolies can break the back of non-monopoly competitors and relegate them time and again to a subservient position, as Trump and the US Department of Commerce have shown in relation to Chinese telecommunications companies ZTE and Huawei. The reason these punitive sanctions were effective, or even possible, is because of the already existing US and broader imperialist domination in the production of the products the sanctions effected – otherwise China could simply work around them.

Societies suffering the legacy of colonial oppression and imperialist subjugation cannot consistently, and across a range of areas, develop groundbreaking scientific advances, nor apply these on a society-wide basis. To make real progress in raising the social-cultural level of a society is not quick or easy. Nor can it be achieved merely by correct policy settings, good luck or a technocratic, business-led development.

Genuine social progress to the degree needed cannot occur outside of and in opposition to the principal centres of scientific knowledge (the imperialist states) without involving mobilisation of the broad masses of the population. Yet that can hardly happen if the main purpose of development is merely to enrich local capitalist classes – and this remains the goal in countries dominated by non-monopoly capital. Moreover, not even the most revolutionary Third World society could conceivably surpass the technical and scientific level of modern imperialist states when operating under the blows of imperialist hostility and sabotage.

What is decisive is that Third World capitalism is prevented even from taking incremental steps that would eventually make possible a challenge to imperialism. This is because as capitalist societies they participate in production of commodities for the capitalist world market. Moreover, they are compelled to do so in accordance with an existing division of labour complete with its established technological and social polarisation. There is no entry point to this system, other than at the bottom.

Thus the very form of their participation in the global economy organically and continuously reproduces in these societies the same broadscale underdeveloped social foundation that makes catch-up impossible. This is why even well-meant policies (such as Made in China 2025 or its various precursors), while they may have an impact, cannot fundamentally change the international position of the host society.

Imperialist monopoly over the labour process is the reason no large poor country has joined the imperialist camp for a hundred years – save for those special cases benefiting from the Cold War blessings of US imperialism, namely South Korea and Taiwan. This is also the reason that world income and world division of labour are starkly polarised into two distinct camps – high and low – as opposed to exhibiting a spectrum of variations, with many middle-income countries. In reality there are almost none.

The two poles of imperialist society have been given many different names over time: core and periphery, North and South, semi-colonial versus imperialist, metropolis and satellite or Third World and First World. It is more important to be clear about what we are referring to than the particular label used. Clarifying what these refer to is the task of this book. As such, any term might do. However, given the growing degree of polarisation between the rich and poor societies (outlined in Chapter 1) and the almost negligible presence of any middle-income societies in between the two poles, it seems the terms ‘Third World’ and ‘First World’ perhaps best express the ongoing relationships of oppression and exploitation of the poor countries. Some readers will be more familiar with using the terms ‘Global North’ and ‘Global South’ as these have become prevalent particularly among non-governmental organisations (NGOs) and academic writing in recent years. However, in many regions of the world, for example Indonesia and Latin America, the terms First World and Third World remain dominant or terms that more people understand or use.

Opponents of this book will contend that its arguments are too determinist, that they amount to concluding history has ended, that no further historical or social development is possible under capitalism. But the book does not imply this. The neoliberal period demonstrated an overall tendency towards rapid technological progress and social change. However, this does not mean that all possible development paths remain open.

Addressing this contention at the turn of the century, Lorimer argued:

The assumption [is] that the possibilities of development open to a given historically conditioned social form of production [i.e. capitalism] are unlimited. The whole facts and processes analysed by Marx, and Lenin, show on the contrary that only a specifically limited and conditioned development of the productive forces is possible to each historically determined social form of production.5

To be sure, China, Brazil, India, Indonesia, Nigeria, Egypt and the rest of the Third World can and will develop. These societies are home to the majority of humanity and occupy most of the Earth’s surface. As strange as it might seem to the imperialist ruling classes and their racist ideologues, it is in the present-day Third World that resides the powerful creativity and as yet unknown potential of most human beings.

What will not and cannot happen is that this awesome human potential, this explosive power, will be unleashed via meek subjugation to the imperialist system and its masters; by obedient participation in the capitalist market, devoted and diligent toil for the production of commodities complementary to the advanced imperialist economies. Nor will liberation be achieved through social movements subordinate to these parameters. There is no possibility of Third World catch-up under capitalism. Though there is every possibility that imperialist oppression and exploitation of the great mass of humanity living in the Third World – and also in the First World – may be capitalism’s undoing. Imperialism in the twenty-first century is expanding the army of its own gravediggers – the world working class – far beyond any it could have previously imagined.

Notes

1 A. Callinicos, Imperialism and Global Political Economy (Cambridge, UK, Polity, 2009), p. 5. For a liberal version, see T. Friedman, The World Is Flat (New York, Picador/Farrar, Straus and Giroux, 2005).
2 L. C. Bresser-Pereira, ‘The Rise of Middle Class and Middle Management in Brazil’, Journal of Inter-American Studies, 4:3 (1962), 313.
3 A. Smith, ‘Deal or No Deal, the Rivalry Between the US and China Will Intensify’, Truth Out (2019), 22 May.
4 Commodity production in this work refers to production for sale of both goods and services.
5 D. Lorimer, ‘Introduction’, in V. I. Lenin, Imperialism: The Highest Stage of Capitalism (Sydney, Resistance, 1999), p. 15.

Imperialism and the development myth

How rich countries dominate in the twenty-first century

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