The Citizen: Issue 3
Recently, the Ireland Institute ran a series of public meetings under the title ‘The New International Order: Imperialism in the Twenty-first Century’. In Ireland, there has been a long-established tendency to misunderstand imperialism as simply colonial domination. On the positive side, this error has been accompanied by generally positive support for peoples and movements in resistance to outside powers and oppression. On the negative side, it has disarmed resistance, politically and ideologically, and made the defeat of imperialism less likely. Failure to understand its economic basis has meant that accommodation with imperialism not its overthrow has been the usual outcome to struggle. This is not surprising, because the ideological shortcomings result in a politics and understanding that puts nation and identity at the heart of struggle not capitalism and class.
This is particularly disappointing for us in Ireland: after all, James Connolly wrote clearly about these issues one hundred years ago. He warned repeatedly that a struggle based on nation and identity might well change the nationality of government but would not and could not defeat imperialism and capitalism. And still, too many of us take Connolly’s presence in the GPO in 1916 and participation in the Rising as confirmation that he endorsed nationalism as a response to imperialism. Even those who understand that socialism and class underpinned all Connolly’s actions and thinking, including in 1916, often fail to see or acknowledge his critique of nationalism. Just as we may travel some of the road with social democracy in the struggle for decent and dignified lives for all persons, so we may travel some of the way with nationalists in the struggle against imperialism – but we understand that neither social democracy nor nationalism can reach the destination we seek or achieve the kind of society in which all can live good and fulfilled lives. When Connolly urged us to hold onto our guns, it was not so that we could turn them against Protestants, Orangemen, or Unionists – it was because he knew that capitalism would continue in control and social revolution would remain to be achieved.
In the lecture series, imperialism was defined in two principal ways. First, it was understood as ‘the creation and maintenance of an unequal economic, cultural, and territorial relationship, usually between states and often in the form of empire, based on domination and subordination.’ The key words here are unequal, domination, and subordination. The second definition of imperialism regarded it as a particular expression of capitalism. For the purposes of the discussion, capitalism was characterised as an economic system in which all wealth is created by people who work, while those who own capital and the means of production appropriate a share of this wealth to themselves. This simple fact has enormous repercussions throughout the economy and society, not least among them being cyclical recessions (to which we will return later). The appropriation of this share of the wealth allowed capitalists to accumulate capital, which they then sought to reinvest in pursuit of further profits and accumulation. [While this process is often correctly described as deferred consumption, where a proportion of what is produced is not consumed immediately but put aside for reinvestment, the term conceals as much as it reveals – after all, under capitalism these processes are neither socially controlled nor in the interests of the whole of society. Workers produce the wealth, and capitalists appropriate some of it; workers consumption is reduced to allow capitalists both consume more than their share and accumulate surplus for reinvestment; and workers gain neither an increased share of wealth nor better conditions from this reinvestment, while capitalists increase their control and wealth.]
In Lenin’s account, imperialism arose when production and capital became concentrated in monopolies, and finance capital became dominant over industrial capital. The export of finance capital (in pursuit of profits) then superseded the export of goods. These developments resulted in a new economic division of the world and a new division of labour, largely brought about by multinational corporations and international cartels. A corresponding political division of the world by the powers accompanied this. According to this model, it is stagnation in the capitalist economy because of structural problems that drives these processes – the structural problems include over-production (amongst other causes, sufficient demand can not be sustained in capitalism, since workers are not paid the full value of what they produce – Marx also placed huge importance on the irrationality of the market as a means of allocating resources) and the over-accumulation of capital (surplus capital accumulates partly because it is no longer profitable to invest it in production). Imperialism provides the short-term solution by investing the surplus capital abroad.
The economic and political issues addressed by the articles in this issue of The Citizen can only be properly understood if they are placed in the context of imperialism and the way that capitalism organises the world. Why is there a major financial and economic crisis? How should the features of the crisis be understood? What are the likely developments in the short and longer terms? How can such crises be avoided? What are the possible solutions? Beyond these immediate questions lies the fundamental question of what type of society we want. In all of the public and mainstream discourse in Ireland, capitalism is accepted as natural and unproblematic: it is the only possible way to organise economy and society and is the source of wealth and well-being. Imperialism is understood in terms of the conflicts that arise from competing interests in the global system, which can be resolved by the proper functioning of the markets and the mediation of international institutions, such as the UN, WTO, IMF, and EU. The idea that capitalism itself is the problem or that capitalism can be challenged and opposed never enters these deliberations.
When we ask what kind of society we want, I believe the most important idea is freedom: we want to be free. In the republican tradition, Rousseau attempted to answer the question of how the individual can be free in society – and this is the crux of the matter: we are unavoidably and inescapably social beings, so how can we be free in thought, in living, in the choices we make, and in every aspect of our lives? Both republicanism and socialism can best be understood in terms of freedom. Some see them as essentially egalitarian philosophies or politics; others emphasise the element of social solidarity and community. A few see the issue in terms of control and power: the objective is to rule, whether in the name of nation, class, or all. But, what these versions lack is that humanistic vision of a society in which human beings can thrive and reach their full potential. Equality, social solidarity, and power are important, but they can not guarantee that liberation of the individual and society that republicanism and socialism promise. Truly free individuals will certainly be equal, but they will neither want nor need an exactly equal share of the wealth in society; there will be social solidarity, but it will exist in human beings creating a free society together not ameliorating an unfree one; and we will have power, but power to shape and control our own lives not the lives of others.
Freedom, of course, is espoused by many, including liberals and capitalists. However, the idea that we can be free through a radical individualism or the outworking of the market is such a narrow and stultifying concept of freedom that it can be rejected out of hand: if freedom is based on each individual exerting themselves on their own behalf to the maximum of their capabilities, we will always be unfree – we will always be in relationships where power is exercised over others and over ourselves. Many of the republican thinkers understood these problems, but they failed to see the centrality of the economy. While Rousseau and others realised that great degrees of inequality would undermine a democratic republic, they failed to see the necessity to extend democracy to the economy. Republicanism is concerned with the full democratisation of the political sphere and the organisation of the economy for the common good. The programme of socialism extends the republican vision to the full democratisation of the economy, that is full social control over the economy. It is only through democratic control of the economy that we can begin to achieve a society in which we can be free – Marx wrote about this in terms of a transitional phase in which economy and society would be increasingly socially controlled and the state would gradually ‘wither away’: it is a vision of a free society and free individuals.
When we discuss the current situation of economic crisis and political stagnation, where the economy is run in the interests of the few and freedom is often reduced to lifestyle choices within the marketing strategies of business, we cannot understand what is happening, much less devise meaningful strategies for action, unless we put capitalism and imperialism at the centre of our analysis. In the mainstream discourse, in the ‘Renewing the Republic’ series in the Irish Times, for example, or on RTÉ, capitalism is not up for discussion, and the more confident protagonists advocate a better, stronger capitalism, while the more concerned hope that rearranging the furniture will make things more comfortable for everyone.
To properly understand the economic and financial crisis, it is necessary to look at imperialism today. Monopoly and financialisation in the capitalist economies are evident everywhere, from New York to London, to Berlin and Dublin. Neo-liberalism may have trumpeted competition and deregulation as its non-negotiable principles; but, in practice, this meant more competition among workers (the race to the bottom in pay and conditions) and more regulation of trade unions and workers’ rights, while capital and business competed less, became more concentrated, and prospered under ‘light touch’ regulation. Production of goods in the developed capitalist countries has been becoming less profitable and stagnating for a long time – as a result, more capital has been invested in an already dominant financial sector and more capital has been invested abroad. We can see these factors at work in Ireland: jobs have been shifted abroad as capital seeks greater returns on investment (e.g. Dell moved from Limerick to Poland, supported by EU funds), and huge amounts of foreign capital were lent to Irish banks by German, French and other financial institutions instead of being invested in production at home (much of this money was lent on by Irish banks to developers and builders, fuelling the property bubble here and creating huge, unpayable debts – Irish entrepreneurs and investors invested very little capital in production in this period).
But these processes are unsustainable over any length of time: all financial products ultimately depend on the wealth that is created by workers. The financial products themselves are ‘socially useless’ and the profits that are made from them are finally a claim on part of the wealth that is created elsewhere in the economy, either now or in the future. In the US, many of those involved in creating the property bubble were aware that the sub-prime market and the financial products based on it were not sustainable (the incomes of those targeted by the lenders would never be sufficient to repay the loans) – some of them even bet against the products they were creating for others to invest in. The property bubble enabled capitalism to defer the effects of the crisis of stagnation and overproduction for several years, but it was only the latest in a series of bubbles in recent decades (others included the dot-com bubble, previous property bubbles, and the credit bubble). The lesson from these bubbles (which should be obvious from first principles) is that there is no solution to the crisis of over-production and stagnation under capitalism other than periodic recessions during which huge parts of the productive capacity are stripped out and much of the over-accumulation of capital is written off – and then the whole process can begin again, restoring growth to the economy, and building towards the next crisis. Much human suffering and misery is involved in this cycle of bust and boom.
In recent months, some commentators have taken to criticising any analysis of the crisis: what is needed, they say, are solutions and proposals for action. This is an ideological response and is literally as brainless as it seems. It is ideological because it only makes sense if it is assumed that the system is fundamentally sound and the solution is a cleaned-up, better capitalism – it is brainless because the people who say this have not thought about what the problem might be and wish to stop others thinking about this. How can we solve a problem if we fail to diagnose it and come to an understanding of what it is and what its causes are? Here, we are clear that capitalism is the problem, and imperialism is the form it takes today: the answers must address this reality.
Imperialism has been facilitated by the architecture of the international political system: the WTO, IMF, World Bank, the UN, the EU, and other organisations prepare the ground for the movement of capital and protection of the interests of capitalists – they are not bodies that are designed to further the common good or the well-being of society. A first necessary step, if we are to really address the crisis, is to take control over global flows of capital away from these institutions and exert democratic control over them instead. As long as these institutions are able to prevent any local or national control over capital and investment, we will be unable to use human and material resources in the interest of all humanity and not just a small class within it. A second necessary step is to take democratic control over the economy and capital: all wealth is socially created, production is an inescapably social practice, and the economy should be under social control, serving the common good. As long as the economy is controlled by capital and run in the interests of capitalists, periodic crisis, the ongoing exploitation of human beings, and the denial of their potential will continue.
This is why so much of what has passed for debate of the crisis in Ireland has been so demoralising: as long as capitalism is regarded as the solution and not the problem, there is no possibility of advance. Proposals to improve corporate governance or the regulation of financial institutions and practices promise only more of the same. Reform of the political system, such as reducing the number of TDs (to free them from clientelism), abolishing the Seanad, or writing a new constitution, is meaningless if that political system is to manage the country in the interests of capitalism. Capitalism and imperialism are the problem: until they are confronted and social control imposed upon the economy, there is no solution that will enable all human beings to live fully realised, free lives, where their needs are met and they are subject to no outside power and exert no such power over others, but where people cooperate to create their world and themselves.