Chapter Four, Imperialism Without Colonies, p. 91 to 113

Chapter Four, Imperialism Without Colonies

a. sudden upsurge in the aggressive pursuit of colonies
b. commercial revolution > disintegration of feudalism > foundation of capitalism
c. colonialism: the control or governing influence of a nation over a dependent people, territory, or people. Has always existed.
1. pursuit/acquisition of colonies
2. military forces defined trade routes
3. upon industrialization, native industry was destroyed, natural resources were stolen,
4. large scale industry based on metallurgy, application of organic chemistry, new sources of power, new means of communication & ocean transport
5. periods: mercantile capitalism, competitive industrial capitalism, monopoly capitalism

Distinguishing features of New Imperialism
a. monopoly capitalism- corporation, high degree of economic concentration
b. nation states develop markets
c. expansion of markets must occur
d. British loans built railroads all over
e. money loans obscure markets
f. foreign sources of energy are required
g. knowledge: 1/3 of capital investment, actual machines is 1/3
h. The U.S. capital contribution for industries is less in poor countries than rich ones
i. domestic labor is “too expensive”
j. 1. the purchase of foreign bonds
k. 2. the purchase/development of oil wells/mines
l. profit rates for transporting minerals are very high
m. depleted natural resources > depleted profit for mining the resource
n. profit rate dominates all investment decisions
o. “business can be understood as a system of power.”
p. owning raw materials allows companies to change their prices
q. low labor costs + politics open to investment: firms move there!
r. the move to manufacture components & finished products in Japan, Italy, Korea, Hong Kong has certainly been felt by certain sections of U.S. Labor.
s. expansive drive for advanced capitalist countries to operate on a world scale
t. the army expands markets and props up other advanced nation’s economies
u. government is a servant of large corporations & banks
v. the government may have wide freedom in determining policy
w. ruling groups might have less freedom: they need a strong economy to maintain power
x. competition among vested interests
y. compromise between Northern industrialists & Southern Bourbons in the US after Civil War
z. compromise between the landed aristocracy & large industrialists in Germany


Structure:
a. a government “must” provide a comfortable environment for the leading industrialists & bankers to operate in
b. reforms must run counter to the basic interests of big business

Basic points:
a. monopoly structure of big business in metropolises
b. the imperative for these economic centers to grow & control materials sources & markets
c. continuation of an international division of labor which serves the needs of metropolitan centers
d. national rivalry among industrial powers for export & investment opportunities in each other’s markets & over the rest of the world
e. keep subordinate nations dependent
f. ward off encroachment of rival powers
g. extend influence and control over reserves of former colonies
h. allocation of resources is the result of many historic forces
i. colonialism destroys traditional power center
j. rulers of colonies were dependent on mother countries
k. preferential trade/political arrangements to maintain former economic ties.
l. manipulation of local ruling groups
m. influencing allocation of resources with the International Monetary Fund (IMF)
n. the US dollar became the dominant international currency
o. NY became the main international banking center
p. becoming the main provider of military & economic aid
q. constructing a global network of military bases & staging areas

The American Empire & the US Economy, p. 67 to 90

1. The American Empire & the US Economy, p. 67 to 90

Common views:

• a. economic imperialism is NOT the root. Political aims/national security ARE the primary motivating factors of US foreign policy
• b. economic imperialism CAN NOT be the root of US economic policy because foreign trade/foreign investment are such a small part of the economy
• c. if we developed other countries in a humanitarian way, they could buy our products so our economy could grow more
• d. wars were fought to institute Christianity
• e. wars were fought to open new trade routes
• f. anti-commercial is thought to be immoral in American culture
• g. political freedom is equated with Western style democracy

Foreign Aid

• a. an immediate market for US goods
• b. new overseas markets are developed
• c. orients other countries towards a free enterprise system
• d. exports are less than 5% of GDP
• e. foreign investment is less than 10% of domestic investment
• f. the importance of foreign economic activity is increasing
• g. abroad profits became an important part of total profits
• h. foreign earnings were understated
• i. international operations minimized taxes
• j. GE executive wanted America to keep expanding its overseas operations
• k. The US Army helped steal land from Indians

military functions

1. a. protect actual & possible raw materials
2. b. safeguard foreign markets/foreign investments
3. c. conserve commercial sea & air routes
4. d. preserve spheres of influence where US can get new markets
5. e. create foreign customers/investments with military aid/economic aid
6. f. maintain the structure of world capitalist markets
7. g. GNP: blocks of billions of dollars
8. h. GNP: useful statistical tool
9. i. Need to: examine the requirements of the industrial structure and dynamics elements of economic behavior

Cyclical Economic behavior:

• a. consumption can be continued with welfare checks, unemployment relief, depletion of consumer savings
• b. investment by businessmen decreases because they want a profit to be made
• c. purchases only declined 19% in the Great Depression
• d. investment dropped 71% to 80% during the Great Depression
• e. military products: main part of economy
• f. foreign markets buy military/consumer goods so minor depressions aren’t as bad
• g. military goods have long term contracts with the government
• i. military sales are a major source of profitability (p. 82 ?)
• j. 100 corporations own 55% of all assets
• k. 5 corporations own 15% of assets
• l. many cross-industry mergers occur with ties to the military
• m. 163 firms hold 80% of all investment
• n.US oil companies controlled 66% of the world’s oil in the 1960s
• o. military bases all over the world keep markets secure
• p. foreign aid is to secure raw materials
• q. integration > not self reliance/ independence
• r. economic self sufficiency is lost/ dependence occurs
• s. Latin America has to import agricultural products and minerals
• t.control markets
• u. minimize costs of production
• v. more profits to produce abroad than to increase domestic consumption
• w. try to get a larger, more secure share of the foreign market
• x. US firms in Britain are 10% of its exports
• y. US makes foreign countries reliant on its technology
• z. US forbids too many imports of luxury products

• 1. US imports many foreign raw materials
• 2. US has a severe balance of payments problem
• 3. fighting Communism is good for profits

The New Imperialism, p. 35-65

Chapter II: The New Imperialism
imperialism: a special stage in the development of capitalism
a. urgency to develop a world market
b. the struggle to control foreign sources of raw materials
c. the competitive hunt for colonies
d. the tendency toward concentration of capital
e. economic power is controlled by a relatively small number of firms
f. pure science > applied science
g. bicycle, typewriter, cheap paper, ready made clothing were developed
h. steel: steel rails/locomotives could make local industry national
p.36
a. major developments in steel, electricity, industrial chemistry, oil
b. steel> internal combustion engines, electric generators, steam turbines
c. reduced the cost of transportation
d. local businesses became national industries
e. alloys> tool steel, armaments, stainless steel
f. London, Milan, NY:first to have commercial power-1880s
g. industrial chemistry advanced
h. metallurgy: heating metals to give them desired shapes or properties
i. 1860s: structural arrangement of atoms in a molecule
j. sulphuric acid and ammonia could now be mass produced
k. 1870: Standard Oil was founded in Pennsylvania
l. surprising: kerosene lamps & lubricants were the original uses for oil
m. monopolistic trends
n. the rise of big business
o. technology led to concentration of power
p. 1870s: business primarily serviced the agrarian economy
q. 1900s: producers goods were created for use by industry
r. most industries were dominated by a few large enterprises
s. big business was vertically integrated, controlled all elements of the production process
t. Civil War + railroad expansion led to powerful financial institutions
u. Big Business led to many depressions, began 1873
v. raw materials gained a new relevance
w. number of commodities entering world markets increased substantially
x. competition among regions increased dramatically
y. the standard of living for workers depended on overseas supplies imports
z. most of the great mineral bearing locations were discovered

Advance in Ocean Transportation & The World Market
a. raw materials could be transported cheaply
b. metal built steamships were used
c. improved steel boilers in the 1870s
d. trans Atlantic cable began in 1866
e. international banking emerged
f. economic power was concentrated in large business units
g. US, England, Germany, Japan, France, Belgium industrialized quickly
h. a lot of capital was required for large projects
i. protective tariffs became more common
j. a wave of militarization ensued

Imperialism & Colonies
a. capitalism leads to concentration of power in corporations/financial institutions
b. internationalization of capital occurs
c. the urge to dominate became integral

Battle Tactics
a. Gain control of raw materials
b. conquest of foreign markets
c. capitalism requires internationalization to flourish
d. foreign investment is an effective method for the development/protection of foreign markets
e. South Korea had low wages so factories were set up there

Big Business
a. cost advantages
b. exclusive patents
c. superior technology
d. preferred market demand: advertising
e. political influence is used: threats, wars, colonial occupation > privileged trade positions
f. strong governments maintain domination & control over weaker nations

Modern Features Of Imperialism
a. shift: emphasis on rivalry > resistance against capitalist expansion
b. US: organizer/leader of imperialism
c. rise of technology which is international in character
After Russian Rev: part of the world that hadn’t industrialized-capitalists tried to conquer it
d. After WWII: US rebuilt Europe, promoted imperialism
e. the UN, World Bank, and IMF-US exercised leading role
f. economic/military aid came from Washington
g. WWII: US in 39 countries!
h. US occupation rose to 64 then 130
i. US controlled 59% of Middle Eastern oil
j. US owns many space stations
k. television promotes an imperialist culture
l. less raw materials are needed: more efficient technology
m. consumer products are more complex
n.synthetic materials have been developed
o. improved organization of scrap collection/utilization
p. 80 to 90% of aluminum must be imported
q. firms want greater profits over human needs
r. the US imports most of its energy, “have-not” nation
s. ores must be imported
t. WWI: the US became much more dependent on foreign energy supplies
u. many civilian & military devices require imported materials
v. at least 40% of materials must be imported
w. the US protects Western Europe’s and Japan’s energy supplies
x. the Communist bloc had much more natural resources
y. if Communism had spread, the US, Europe & Japan would not have access to the raw materials they wanted

The US as the Leading Capital Exporter
a. the US took over Britain’s markets
b.WWI: US imperialism accelerated
c. concentration of investment in Canada, Latin America, Europe
d. the US controls half of automobile industry in Britain
e. 40% of Germany’s petroleum
f. 40% of telephone, electronic, telegraphic, statistical equipment in France
g. 75% of France’s computing machines
h. the US really dominates Europe with its products

The Achievement of Paul Baran, p. 20 to 34

Chapter II, The Achievement of Paul Barron, p. 20-34

Paul Baran was a social scientist/Marxist

Marx could explain:
a. Why societies change
b. on the origin of development of capitalist society
c. the transformation of capitalist to socialist society

Marx’s approach
a. ask important questions
b. seek out significant relationships between numerous social and economic phenomena 
c. approach problems as Marx would (obvious)
d. re-examine society including new developments and facts

A Fine Intellectual: characteristics
a. brilliance, restless curiosity
b. a well-trained and well-equipped mind
c. Russian, German, and Anglo-American culture strengthened his analytical powers
d. passionate: in the search of truth!
e. social responsibility: write to criticize the evils of imperialism
f. insists on the need for change in the world
g. philosophers need to do more than interpret the world

problems
a. passion can interfere with objectivity
b. overly objective courses: will not take a critical stance about established institutions

A fighter!
a. for the progress of man
b. for knowledge
c. for the defeat of irrationality

The Quality of Baran’s Thought
a. an original thinker cannot be given a label such as Marxist
b. typical academic economics does not tackle major problems in capitalist society
c. “social science should tackle not dodge central issues.”(22)
d. capitalism is a developing organism
e. capitalist society must be distinguished from all other previous societies
f. a critical approach is required


Mysticism
a. a single formula to describe many social, economic, political, culture phenomena simultaneously
b. a never-ending approach to synthesis is required

Problem with traditional institutions
a. separate disciples do not allow overlap of subject matter
b. all subjects are inter-related

A Better Approach
a. economists can learn from sociologists
b. sociologists can learn from political scientists
c. psychoanalysis can be utilized as an inspiration
d. contempt for complacency
e. sense of irony

f. hatred of sham & irrationality

Reason
a. Baran didn’t believe in Satan
b. objective reason was not god-given or independent of man
c. objective reason was a product of man, anchored in man’s expanding and deepening understanding of nature & society
d. the pursuit of reason led to concrete explorations & practical exploitation of the natural conditions of progress.
e. irrationality must be fought because otherwise man cannot improve his lot

Failures of Bourgeois Economics
a. a market does not operate rationally
 b. unions and governments interfere with the market
c. the market is not the highest form of man’s wisdom
d. markets are irrational!
e. how can markets be rational if economic institutions produce industrial advanced nations & continually underdeveloped nations?
f. modern economic theory doesn’t question fundamental assumptions
g. concern for ills but not causes is problematic!

Various Economists
a. Ricardo/John Stuart Mill: market equilibrium: how does it occur?
b. Keynes: analyzed business fluctuations, avoided issues of secular growth and decline

Socialism
a. develop productive resources 
b. fight imperialism
c. help underdeveloped countries develop
d. a conservative middle class limits what socialists are able to do

Are markets rational?
a. customary markets can be disturbed by revolutions
b. a revolution can hurt markets but insure certain segments of the population have certain resources
c. a high growth rate within an economy can still leave certain segments of the population without certain needed resources

Censorship
a. British economic magazines would not publish Baran’s article: “On the Political Economy of Backwardness,” because it questioned the assumption that it is good for some nations to be advanced while others are underdeveloped

Solving Social Problems
a. economic/social analysis provides the most effective apparatus for understanding the problems of economic development
b. society is a developing organism
c. it is unscientific to assume that the progression from feudalism to capitalism to socialism is the necessary course of events that must occur

Assumptions
a. important sections of the bourgeoisie will fight for political independence & will support measures to break free from economic imperialism
b. economic independence can be achieved without disrupting or destroying the trade channels, financial institutions,, and the market relations on which the independence striving bourgeoisie depend for their prosperity
c. remove imperialist domination/feudal fetters> rapid industrialization can occur under state protected monopolies
d. imperialism can be removed through the revolutionary participation of the oppressed classes

Baran’s Analysis of Underdevelopment
a. the analysis of monopoly capitalism in the USA

Marx had a theory to explain 
a. the historical development of capital itself and its change from merchant to industrial capital
b. the distribution of incomes and the struggles over distribution of income
c. the nature and limits of the economic & political struggle over the length of the working day and conditions of work in the factory
d. the rise of productivity and the advance of technology
e. the drive to accumulate capital from historical origin in primary accumulation to its position as the controlling force in expansion/contraction in capitalist economy

Improvement
a. surplus must be used to meet the needs of the people

Slow Improvement?
a. rapid population growth
b. corruption in government
c. squandering of resources by local oligarchy

Real Improvement:
a. large investments in construction & machinery
b. long-term planning
c. & overcoming tradition-bound patterns of work and thought
d. these shift a nation into high gear & increase the output, industrial capacity, and promote a rise in living conditions
e. socialist planning

Political Independence:
a. the right to choose an imperialist is not much of a right at all
b. imperialism is difficult to remove politically

Best
a. development over stagnation
b. growth over decay
c. culture over barbarism
d. reason over myth
e. “humanity’s claim to life, development and happiness requires no justification”

Imperialism Without Colonies, p. 1-19.

Outline of Book:

Chapter 1:
-How imperialism was built?
-Prominent Socialists’ analysis

Chapter 2:
-Nature of Imperialism
-The Economic Mechanisms of Imperialism

Chapter 3:
-The role that imperialism plays in sustaining U.S. capitalism
-The U.S. has played a leading role in U.S. imperialism

Chapter 4:
Where is modern imperialism within the history of imperialism

Ch. 5:
-the capitalist system brings war

Ch. 6
Imperialist countries dominate and exploit the Third World

Introduction:

Imperialist countries dominate and exploit the Third World

-Transformation of the US from a nation-state to an imperial power
-America is an empire
-Haas wants to acknowledge-Washington has imperialist leanings
-US has imperial power like Britain in the 1800s(19th century)
-The U.S. ruling class is imperialistic
-the US helped supply troops for European military conflicts

“War on Terrorism”
-imperial US military policy was easily observable

US as a new kind of empire

Tenants of US empire
racism
economic exloitation
colonialism

These tenants are ignored- instead the US is said to be promoting “freedom” and “human rights”

A great military power “protects”
free markets
human rights/ democracy


Marxist perspective:
wars are a byproduct of imperialism

Classic imperialism
-The “Imperialism of Free Trade” by John Gallagher & Ronald Robinson
-imperialism: a continuous reality of economic expansion in modern times

British model
extend control informally if possible
extend control formally if necessary
“trade, not rule”
trade with informal control if possible
trade with rule when necessary

Primary focus: “imperialism of free trade”

South America
-British used commercial treaties & financial relationships backed by British sea power
-Britain took raw materials and food from the colony

Imperialist development
-usually informal
-formal rule is not the usual type (argued by Lenin)
-semi colonies may exist
-monopoly capitalism is imperialism

Contemporary Imperialism
development of the world market
division between the core & the periphery
the competitive hunt for colonies or semi-colonies
the extraction of surplus
the securing of raw materials to bring back to the mother country
analysis: imperialism was present in capitalism from the beginning

Problems
capitalists stole resources from poor countries without meeting the needs of the inhabitants
coercive methods were utilized

“New Imperialism”
the breakdown of British hegemony and increased competition for control over global territories between the various advanced capitalist states
the rise of monopolistic corporations as the dominant economic actors in advanced capitalist states- “the urge to dominate is integral to business”
contained: race to extract surplus
the race for control of raw materials
the creation of economic dependencies in the global periphery
the unending contest among rival capitalist powers

Mainstream versus Marxist perspectives

Mainstream
imperialism is mere policy, which is associated with the political and military actions on the part of states
imperialism is only present in overt instances of political & territorial control ushered in by actual military conquest

Marxist interpretation
imperialism occurs through the policies of state but also through the actions of corporations and mechanisms of trade, finance, and investment
monopoly capitalism-must be included & explained
struggles over hegemony & rivalries among primary (leading) capitalist states were continuous & depended on economic/political/military resources at their disposal

Imperial America in the Post-Cold War World

The development of Modern Imperialism
giant corporations rose to dominance (*)
British hegemony declined
advanced capitalist states fought for hegemony
The Soviet Union fell in 1991
Kissinger said: “the US has achieved a pre-eminence not enjoyed by the greatest empires of the past”

What will the US do with its enormous surplus of power?
control Iraq’s oil and gas deposits
restructure the economy with puppet leaders to submit to the capitalist world economy
nation building: includes disarming local opposition

Criticism:
US imperialism is particularly blatant because of the endless series of wars it is engaged in
capitalism promotes economic, political, and military domination

Moving Forward:
1. humanity must struggle to free itself from global exploitation and from seemingly endless wars of terror & destruction through which such exploitation is made possible