This diary series is a slightly edited version of Contradictions of Capitalism, a book that I wrote in the early 90's which is still available now on Amazon. I have updated some parts of it to reflect the very important changes in the corporate economy since the mid-1990s with the appearance of a global economy rather than a national, which has important effects which much of the socialist movement has still not fully grasped.
Previous entries in this series can be found here:
Part One: http://www.dailykos.com/...
Part Two: http://www.dailykos.com/...
Part Three: http://www.dailykos.com/...
Part Four: http://www.dailykos.com/...
Part Five: http://www.dailykos.com/...
SIX: The Rise of the Leninist Mode of Production
By the time that monopoly capitalism was beginning to arise in the industrialized nations, the world had already been divided into “developed” and “undeveloped” spheres. In the former, the rise of the capitalist bourgeoisie led to the introduction of competitive capitalism and thence to monopoly capitalism. These nations were industrialized and featured a large output of consumer-oriented commodities. Manufacturing and industry were the major sources of wealth.
In the so-called “Third World” nations, however, the situation was completely different. In these nations, the bourgeoisie had never risen to power, and the ancient feudal traditions had never been broken. In countries such as China, Russia, the African nations and Latin America, economic conditions remained essentially feudalist in nature. Feudal aristocrats ruled under various names and titles, and the source of wealth in these agrarian nations was land. Wealthy landowners stood at the top of the economic ladder, and the masses of serfs and agrarian peasants labored to pay their rents and make a living. To all intents and purposes, economic life had not changed much in these areas for the past thousand years.
The student of economic history is therefore forced to ask why these economies had not taken the direction demonstrated in Europe; that is, how was the feudal system able to continue and dominate the economy in these areas? To begin to answer this question, we must take another look at the rise of the European bourgeoisie.
As the bourgeoisie began to rise in importance during the Middle Ages, the economic circumstances of their existence led them to seek foreign sources of exotic commodities for sale to the feudal lords. During these quests for new sources of commodities, the European bourgeoisie first made contact with the peoples of Africa, Asia and, later, the Americas. These traders exchanged European commodities for the native goods they wanted, then sold these native goods in their own home country.
As a result of this commercial trade, sections of the native populations left the feudal landholdings and, like the European artisans, began to make their living by mediating trade between the Europeans and the non-Europeans. In China and the Far East, these merchant-middlemen were known as compradors, and this term has come to be applied to the class of people who perform these functions in all of the feudal nations.
As it did in Europe, this commercial relationship led to the monetarization of the economy and the transformation of the serf-landlord relationship. In order to obtain money for exchange with the Europeans, the native feudal aristocracy began to turn their land from food production to the production of those exchange goods the Europeans wanted, such as silk, tea or spices. In addition, the traditional feudal “tax in kind” was replaced by a monetary rent.
The results profoundly changed the economic structure. From the traditional serf-lord relationship, the basis of the economy was transformed into a landlord-peasant relationship.
While the exchange arrangement set up between Europe and the non-industrialized countries brought benefits to both, these benefits were greatly lopsided in favor of the Europeans. With their greater capital resources and their more highly developed methods of commerce, the European bourgeoisie came to dominate the economy of the native countries. They were able to extract large amounts of exotic trade goods (which could be sold in Europe at huge profits) and also to provide European commodities to the natives at an equally large profit.
As the feudal monarchy and the bourgeoisie entered the stage of mercantilism, increasingly stronger steps were taken to safeguard and expand this lucrative trade arrangement. At the point of a musket, European armies overran huge areas of native lands, imposing control over these “colonies”. Some (such as Latin America and parts of Africa) were conquered by direct military force and were ruled directly by European military governors. Others, such as China and Russia, were too large or too strong to be conquered, but were controlled by co-opting the feudal monarch (the Emperor and the Tsar). Soon, a vast amount of wealth began to flow from the conquered colonies into the European monarchy’s treasury (as well as into the pockets of the bourgeoisie).
By the time the bourgeoisie managed to overthrow the European monarchies and establish their own regimes, they had established military, political and economic control over vast areas of native territory. The Spanish and Portuguese held most of Latin America, the French and British divided up North America, the Italians and Germans held most of Africa, and Asia was held piecemeal by virtually all of the capitalist powers. Using their superior economic resources and their superior military force, the Europeans grew rich by extracting wealth from their colonies.
After the Industrial Revolution, the emphasis of the capitalist bourgeoisie changed from the procurement of trade commodities to the extraction of cheap raw materials and labor resources from the colonies. Plantations and agricultural enterprises, which yielded huge profits, were also monopolized by the foreigners.
In nearly every instance, each colony was forcibly specialized to produce a single commodity needed by the foreigners. The Spanish colony of Bolivia, for instance, was turned into a huge tin mine, while Indochina was transformed into a vast rubber plantation for the French. Cuba produced sugar for European consumption, Colombia produced coffee, Honduras produced bananas.
Nearly all of the choice land resources in the colonies were seized by the foreigners, who used them to produce their single-commodity export. The rest of the land was occupied by small subsistence farmers, the peasantry, who rented the land which they worked from the wealthy native land-owning aristocracy.
In the manufacturing sector, foreign domination was equally complete. The colony’s industrial sector was small, but it was used to produce the cheap raw materials and sub-assemblies needed by the European factory system. While these colonial enterprises employed a number of local workers, the management and capital of these enterprises was always foreign, and the profits from the enterprise were always repatriated back to the imperialist nation.
The native merchant class was eager to begin manufacturing commodities of their own, but found this to be nearly impossible in the face of the near-total domination of the economy by foreign capital. In most instances, the superior productivity of the imperialist’s larger capital and the correspondingly lower prices of his commodities meant that the native manufacturer could not compete in his own marketplace.
Thus, the native merchant class was able to survive only by subordinating itself to the foreign imperialists and catching the crumbs which fell from the foreigner’s table.
The near-total foreign domination and the consequent lack of a native manufacturing class had far-reaching effects on the economic and social structure of the colony. In Europe, the introduction of the factory system had resulted in the flow of agrarian workers into industry, as landless serfs hired themselves out as laborers. In the colonies, however, where manufacturing was restricted, excess agricultural workers could not be drained off into industry. This in turn forced the population to remain dependent on the agrarian sector, pushing people into bare subsistence farming in a futile attempt to pay high rents and eke out a living.
Such a heavily agrarian population is perfectly suited for exploitation by the monopolists. The enormous pressure put on the land by the lack of industrial development allows the land-owning class to charge usurious rents for postage-stamp farms. At the same time, the dependence of the colony’s economy on a single export commodity leaves it vulnerable to the monopolists who control this commodity, allowing foreigners to use their economic leverage to dictate terms of trade and economic relations. Finally, the enormous reserve of labor created by the overcrowded agrarian sector allows the monopolists to keep wages at a bare subsistence level, thus insuring super-profits for the foreigners.
As imperialism and monopoly capitalism began to establish a worldwide network, native colonies began increasing efforts to expel the foreigners and regain control of their own country. These revolts were constantly beaten back by the imperialist’s armed forces, but in the end the monopolists realized that, provided they still retained de facto economic control, it would do them no great harm to grant the colonies political independence, and thus allow them to pay for their own government and administration. After World War II, there was a virtual wave of decolonization. In reality, however, the imperialist powers still held the reins, through their economic domination and through the installation of pliant comprador regimes which were tied to the interests of the monopolists.
Thus, the introduction of “decolonization” did virtually nothing to change the structure of the neo-colony. The native landowners still constituted the economic elite. The peasantry still worked the fields and paid outrageous rents to the landlords. The bourgeoisie was still dominated by the foreign monopolists, and the working class still labored for the foreign-owned enterprises, which still repatriated their huge profits. In addition, the middle class or petty bourgeoisie, made up of intellectuals, managers, professionals and small business owners, were immobilized on all sides by the tight web of foreign domination.
When it became apparent that political independence would mean nothing without economic independence, nationalist movements began to arise in the neo-colonies. The comprador state and the landlords, who depended on the protection of the foreigners for their very existence, found themselves under increasing attack.
The neo-colonial bourgeoisie’s interests lay in beginning their own manufacturing enterprises to accumulate capital for themselves, but this was prevented by foreign domination of the economy. The interests of the peasantry lay in deposing the landlords and obtaining ownership of their own land, but this was also prevented by the imperialist-backed comprador government. The interests of the workers lay in political and economic freedom so they could organize a labor movement to improve their conditions, but this was impossible. And, finally, the petty bourgeoisie wanted a chance to depose the foreign-backed government and install a new economic regime beneficial to it. Only the landlords, along with those sections of the bourgeoisie who were totally immersed in the monopolist economy, supported the imperialist domination—they had nothing to lose under it and everything to gain with it.
Economic domination by the foreigners meant that the native industrial bourgeoisie and the working class were embryonic at best, and in many neo-colonies they were virtually non-existent. In practice, this left the peasants to form the anti-imperialist nationalist forces.
The class struggle dynamics of the neo-colony are clear. On one side are the land-owning class and the state, which are supported and propped up by the imperialists. On the other side is the petty bourgeoisie, the peasantry and the fledgling working class. The bourgeoisie is divided, with one part supporting the privileges it gains under imperialist protection and another part wishing to overthrow the foreigners and establish their own regime. Thus, nationalist expressions in the neo-colonies are partly anti-feudal and partly anti-imperialist.
Economic stresses in the neo-colony also inevitably lead to revolutionary pressures. The tiny “postage stamp” farms cannot be worked efficiently with modern machinery, and the peasants could not afford to purchase such equipment even if the foreign-dominated manufacturing sector would produce it. As a result, food production slowly lags behind population growth, leading to widespread poverty.
Obviously, to improve agrarian output and feed the population, the economy must invest resources into industry to produce agricultural equipment. However, since the imperialist-dominated economy is directed towards the needs of the monopolists, not the neo-colony, this will seldom occur under the existing system.
The only solution is the removal of imperialist domination and the assumption of economic control by the indigenous people, in order to meet their own needs. Thus, economic necessity forces the neo-colonies to attempt to wrest control of their own economic resources through a nationalist rebellion. Since the imperialists fight to protect their comprador clients, and since peaceful struggle is limited by the existing social structures, these nationalist rebellions invariably take the form of armed “wars of national liberation” to free the economy from the grip of the monopolists.
In Europe and North America, the introduction of machinery into agriculture took place during the Industrial Revolution. This huge investment of capital could not, however, take place until the existing feudal social relationships were broken by the bourgeoisie, which was supported in this task by the peasantry and the rising working class. In the neo-colonies, though, the bourgeoisie is weak and divided, and does not have the economic or political power to lead and carry out an anti-feudal and anti-imperialist revolution. In the absence of a developed bourgeoisie, the task of directing the anti-feudal rebellion and of constructing a new economic system falls to the petty bourgeoisie, allied with the peasantry and the working class.
To succeed in this task, the petty bourgeoisie must be anti-imperialist in its outlook, it has to advocate rapid industrialization and mechanization, it has to have an anti-feudal and anti-bourgeois ideology, and it has to have the support of the peasants and, to a lesser extent, the workers. In 1917, a political party with all of these characteristics deposed the Russian Tsar and seized power.