[OPE] Britain--parasitic and decaying capitalism: A comment

A comment on David Yaffe's article "Britain--Parasitic and decaying
capitalism".

The general outline of the article is consistent with the orthodox
theory of imperialism going back to Hobson and Lenin. But even after
subtracting the typical complaints against other far-Left groups in
Britain, I find parts of the article unconvincing and not well-argued.

Imperialism
--------------------------------------
A key problem is that what actually constitutes 'imperialism' is not
well defined, and in what sense its operation differs from the laws of
motion of capitalism that operate within an established market. I would
agree that the classical era of capitalist imperialism was characterized
by the dominance of the rentier interest and its distinguishing feature
is the 'export of capital', i.e. global investment, as opposed to the
export of commodities. But I do not think these features are sufficient,
and to believe they are will lead into the traps of nationalism and
misconceived notions of 'national oppression'.

If capitalists in region A invest in region B, this in itself is not
imperialism, but the operation of capitalism. Further, if the
capitalists are transformed into rentiers that merely transfer interest
payments and dividends from region B to A, then it is the operation of
capitalism with finance capital. Both scenarios occur persistently
across regions, especially between countries considered to be 'imperialist'.

If 'imperialism' is to mean anything specific it has to relate to
'empire' and therefore to the system of territorial states which
pre-dates capitalism. Classical imperialism in the capitalist era then
was the convergence of the rentier interest and the interests of the
territorial state to establish the above scenario in regions where
either the market did not exist or where states opposed the capitalists
from outside. Capitalist imperialism is therefore the set of
extra-economic mechanisms of coercion used by states when the standard
operation of rentiers through an established free market cannot operate
in a region for various reasons.

The extraction of interests and dividends by rentiers in Britain from
various regions of the world is not equivalent to 'national oppression'
as such. Any oppression that results from this economic relation is done
by the rentier class, the state apparatus and the client states or
organizations that they may involve and not the exploited classes in
Britain. (The only sensible use of 'oppressor nation' is the case of
settler-colonial states, when an entire community is founded in a region
that exploits or excludes the indigenous population.)

The article rightly points out the differential between rates of return
on foreign assets flowing between the rich and poor regions. This is to
be expected since capital exports from a region is driven by precisely
the low rate of return that follows from a stagnant workforce and high
levels of capital investment.

This may very well lead to a parasitic extraction by agents in the rich
countries but to conclude the nature of this it would be necessary to
look at the income flows across all regions. A substantial---I would
guess the bulk---of these streams flow between the advanced countries.
It is however clear the advanced economies that have been running a
persistent trade deficit the past years are parasitic since it means
that they are appropriating a part of the surplus product produced
elsewhere, from both developing and advanced countries.

Moreover, it does not follow logically that a high rate of return in
underdeveloped countries is a result of super-exploitation. Work by Paul
C, Allin and myself has shown that rates of return on capital stocks are
independent of the wage share, and are determined by the growth of
labour, productivity and the level of investments. Still less does it
entail that rate of exploitation would be lower if the local working
classes were exploited by 'national' capital.

Labour aristocracy
--------------------------------------
It is certainly true the current levels of living standards in the
advanced countries are dependent on income flows from abroad. But to
conclude that there exists a 'labour aristocracy' that is somehow bribed
by super-profits from 'oppressed nations' is a really weak theory in my
view. The article does little to corroborate the theory by identifying
the sections of the working-class more precisely; how they actually are
benefited by super-profits; from which investments are these
super-profits in 'oppressed nations' flowing; how this hypothetical
economic relation leads to an ideological mechanism which supports the
rentier interest?

The only plausible candidate for the so-called 'labour aristocracy' that
the article gives is within the financial sector, which I agree is
unproductive and the center of the rentier interest. Employees in the
financial sector have an interest in preserving their employment and
therefore also the financial system.

But I think the general argument behind the 'labour aristocracy' thesis
is conflating the professional middle-class with the working-class. They
do not share the same positions in the economic structure anyway. In my
view this theory was primarily adopted by small far-Left groups who
failed to give a proper account for the reformism within the
working-class movement and hence their own political weaknesses. The
consequence of such a theory is to destroy the confidence of the labour
movement in the advanced countries.

The real issue is the need for global trade-unions with coordinated
activities across borders, and the primary obstacle is the
wage-differential between regions of varying levels of development in an
era of global capital flows. It makes capital flow to low-wage economies
with labour reserves and migration flow towards the high-wage economies
which weakens bargaining power there. This creates real problems for
socialist politics in the advanced countries and is predicted to
stabilize once the labour reserves begin to deplete. Then the bargaining
power of labour can begin to rise on a global scale.

//Dave Z
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Received on Sat Dec 26 18:18:22 2009