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Anyone who has traveled amongst the United $tates, Canada, England, France and Germany on the one hand and the Third World on the other hand understands broadly speaking that the imperialist countries are roughly similar. There are a number of historical reasons why the class structures of the major imperialist countries are roughly similar. In this first section of part "C" of the essay we hope to give readers an idea about the unity and conflict amongst the imperialists, particularly as that unity and conflict is rooted in dynamics of capital accumulation.
One reason for the similarities of the imperialist countries is the historical end of colonialism. Previously dominant imperialist powers could exclude other imperialist countries completely from dealings with their colonies. In this way, English imperialists sucked superprofits out of English colonies that they did not directly share with imperialists from other countries. When colonialists directly ruled the colonies it was possible to exclude competitors from territory. Competing colonialists had no choice but to go directly to war for colonies or be excluded entirely.
In 1914, the pattern of foreign direct investment was for the industrial countries to put their capital into the colonies. Hence, 62.8 percent of investment went to the Third World and only 37.2 percent went to other colonial countries. The situation reversed after World War II, and by 1985, 75 percent of investment occurred from one imperialist country into another and only 25 percent went to the Third World. As we might expect in such a situation, the agricultural and mining components of cross-imperialist investment are small, but financial services has seen a huge growth. If we combine financial with trading services, we have a pretty good idea of what business the imperialists are doing with each other. Such cross-border investment does not prove that the Third World is irrelevant. Since trade and finance do not produce physical wealth themselves, it only proves that the activities of the unproductive and parasitic sectors have been spread around, so that no one imperialist can enjoy parasitic advantages over another, as in the old days of colonialism. "As a percentage of the outward FDI [Foreign Direct Investment-ed.] stock [which means total quantity, not the increase per year-ed.] in services of 11 home countries, the share of finance-related services ranged from 27 to 84 per cent in the first half of the 1980s. That of trade related services for the same countries was, with three exceptions, between 22 and 42 per cent. Similarly, as a proportion of inward FDI stock in services, and both for developed and developing countries, finance-related services and trade-related services together typically account for 50 to 90 per cent." (52 )
Now no single imperialist entity can completely exclude other imperialists. As a result, the possible outlets for capital exported from the imperialist countries have become more similar. As late as 1970, cross-border movements of capital were relatively infrequent in the imperialist world. We could say that there was mobility of capital within the United $tates, but we could not say capital was mobile across imperialist country borders. With the collapse of colonialism, all that changed.
In 1970, the cross-border transactions of bonds and equities (shares of property) compared with the annual product of the United $tates, Germany and Japan were all less than a figure of 4 percent respectively. By 1990, the figure was 92.5 percent for the United $tates, 690.1 percent for the "United Kingdom," 57.5 percent for Germany and 118.6 percent for Japan.(53 ) These figures are represented as a percentage just to give readers an idea of the size of capital movement relative to economies. According to Richard Marston, when we speak of the integration of finance capital, we had better be up-to-date, because it is one of those rare social statistics that changed extremely rapidly in recent years.
One might think that a few major banks of a country might be able to collude and set the interest rates in its country. However, this turns out not to be true. It is true that "five British banks controlled 45.6 percent of British bank assets in 1986, while six German banks controlled 37.9 percent of German bank assets in 1987. . . The largest five commercial banks in the United States controlled only 12.8 percent of total U.S. bank assets in 1985."(54 ) Despite this concentration of capital, the interest rates offered on certificates of deposit are very highly correlated with each other across borders in the major imperialist countries. That means each major bank takes a substantial risk that its depositors will leave the country if competitive rates of interest are not offered. Given that a bank cannot set its interest rate in an imperialist country, it has an increased interest in arranging for collusion of finance capital on an international plane, and not nationally. Thus interest rates converge amongst the finance capitalists of various imperialist countries.
What is true of how banks have to attract deposits is also true about how banks have to attract borrowers. Quadrupling between 1980 and 1991 international bank loans reached $3.6 trillion.(55 ) In statistic after statistic, Marston shows that the finance capitalists rush around the world to find any of the quickie profit differences they can. If it is cheaper to borrow British money in Paris than in London, the capitalists quickly take care of that difference by raising demand in Paris. The only thing the finance capitalists cannot completely control yet is profits and losses caused by changes in the exchange rate between currencies. Finance capitalists who could really master this problem would make tremendous profits, but still the job is perpetually left undone, because huge losses are also possible. Even in this problem, however, the finance capitalists have found a way to remove the whole uncertainty of exchange rates: they swap promises with each other to trade currencies at a set rate some day in the future. Hence, if they want to, the finance capitalists can undertake their deals without worrying about how the exchange rate will change. All in all, we have to agree with Marston: "If the major financial markets were completely deregulated and international capital flows were liberalized, the only notable interest differentials to be found would be those between currencies. Those interest differentials would depend primarily on expected changes in exchange rates. Today deregulation and liberalization have progressed to the point that such an idealized world is close to reality, at least with respect to some financial instruments in each national market."(56 ) Indeed, the fact of international banking integration was made into a treaty of 10 imperialist countries in 1988 after England and the United $tates signed their own deal in 1987. Now the standards for what portion of reserves a bank can keep relative to its loans is the same in all of the "G-10" countries. That means each country put aside its own desire to obtain specific competitive advantages for its banks and agreed to play by common rules and regulatory theories. Had the other 8 industrialized countries not joined the United $tates and England in their treaty, the two would have cut them out of their banking markets.(57 )
One of the backhanded admissions that the Marston study makes is important to communists. It turns out that an advanced industrial country can put effective controls on capital. This is seen now with the difference made by the removal of old capital controls. Capital cannot flow out of an advanced industrial country at no cost if the government decides to place capital controls.(58 ) Some capital will evade the law, but not all of it. This idea is also important to the social-democrats, who argue that capital will "go on strike" or AWOL if there is too radical a change of government. We would add that a government with a real People's Army would be even more difficult for former capitalists to evade under a dictatorship of the proletariat in an isolated advanced industrial country. Until there is a global communist system, some capitalists will be able to escape with some of their wealth when conditions arise that they do not like.
The exception to the integration of finance capital internationally is the case of the rising would-be imperialists not accepted by the existing gang of imperialists--perhaps Chinese social-imperialism for instance. China is not yet included in the statistics on the advanced industrial countries, because it is still too different.
Besides the end of colonialism and the radical expansion of the flow of capital across borders, there are numerous historical factors contributing to the integration of the overwhelming majority of imperialist states. Western Europe, the United $tates and Japan also shared some history of alliance. The U.S.-led imperialist bloc was open within itself and relatively closed to Soviet social-imperialist operation. Likewise, the Soviet bloc was relatively impermeable to the the U.S.-led bloc; although there were always business exceptions made on both sides of the Berlin Wall. Soviet monopoly capitalists operated in the West and Western monopoly capitalists operated in the Soviet bloc. Things such as détente did pave the way for the Soviet social-imperialists to attempt to try a life as ordinary Western-style imperialists.
If capital is allowed free flow between places, as it is in the 1990s, we can expect the rate of profits and superprofits to become similar across those places. If the profit rises somewhere, the capital will flow to that place from all over the world, if there are no political obstacles. In fact, if there are political obstacles, if the profit differential is great enough, the capitalists wishing to invest where there are political obstacles will see to the removal of those obstacles through bribery or war. The long-standing freedom of movement for capital that has existed within the old Western imperialist bloc led by the United $tates against the old Soviet social-imperialists is the major reason that MIM believes it proved the nature of the Western European class structure in MIM Theory #1. U.$. imperialism is such a large share of imperialism overall that what is true for it is likely true in European imperialism as well.(59 )
Even more important in this process than the openness of the neo-colonies is the openness of the imperialist countries. If Amerikan capital is heavily invested in Latin America, then French capital can share in the swag from Latin America simply by investing in the United $tates. Japanese banks can and do buy interest-bearing securities in the United $tates and collect a share of the loot wherever the U.$. monopoly capitalists got it. In the private sector, other imperialists can also integrate themselves with U.$. imperialism. By 1990, the Japanese owned 14 percent of U.$. banking assets and 30 percent of California's outstanding loans.(60) Then President Bush found it necessary to defend the interpenetration of capital: "'Don't get so concerned over foreign ownership that you undermine the securities markets in this country. We have horrendous deficits, and foreign capital joins domestic capital in financing these deficits.'"(61)
Although the United $tates is the military power that could have pretensions to closing off entire regions of business operation to other powers, in fact, the limited extent to which this occurs is vitiated by the fact that imperialists are even more heavily invested in the United States than they are in the neo-colonies directly. Exceptions tend to be countries like Cuba, Libya, Iran and Iraq. In each of these countries the United $tates attempts to use military and political power to control the penetration by other imperialist countries. However, even in those rare cases, the other imperialist countries sometimes do stay out completely as they did in Iraq for a brief period of year or they go in and Amerikan investors can play the same game in reverse: whatever superprofits the other imperialists may obtain end up being shared through the Amerikan capitalists' investments in Europe. The idea that Canada and Europe will pick up on business in Cuba while the United $tates will miss out on opportunities to make profit is true only to a very limited degree, because of the high Amerikan penetration of the Canadian economy for instance. In Canada, the Walmart sells Cuban pajamas that its parent in the United $tates cannot sell thanks to special Amerikan anti-Cuba laws. Hence, capital with the same national identity can have different political faces.
At the most abstract level, the fact that each imperialist country's central bank buys securities or currencies from the others' central banks guarantees that no Cuba-style examples accrue too much to any one imperialist in the current period. If Canadian imperialists collect superprofits from their operations in Cuba, then the imperialists all over the world rush to buy the Canadian stocks and force up the price of the stock. That decreases the Canadian profit rate to normal for the imperialist bloc overall. If a Canadian bank does more business with profitable companies with operations in Cuba, capital rushes into that bank, perhaps changing its national composition. The interest rate that an imperialist government pays on its bonds is in some ways an indication of the profit rate nationally. Even in this most general form of profit-sharing, the imperialists conduct extensive and sophisticated trade. From time to time the New York Times will complain how difficult it is for European and Amerikan imperialists to operate in Japan, but that is a case we will handle later.
The imperialist chauvinist-economists and the imperialist media interpret the investment of imperialists in each others' economies as a matter of the vaunted productivity of European and Amerikan workers, always turning up somewhere and guaranteeing a new investment's success. What is really happening instead is two things: 1) The imperialists find it convenient to win over the labor aristocracies of foreign imperialists by setting up operations in the foreign imperialist countries. For example, Japan sets up car factories in the United $tates in an effort to extend the U.$. imperialist labor aristocracy's alliance to imperialism in general and not just U.$. imperialism. It is harder for an Amerikan worker to go on a Japan-bashing craze when Japanese capital is putting the gravy in his/her trough. For example, Tennessee competes with other states in the United $tates to obtain Japanese investment. In 1987, Japan had 47 facilities and 10,000 workers there. Such investment is enough to attract a governor's attention. The governors then lobby in Congress for favors for foreign investors.( 62) 2) The real opportunity for profit comes from buying cheap labor-power and other primary and semi-finished resources in the Third World and selling in the imperialist countries. This may appear to be the vaunted "productivity" of the sales and banking staffs of imperialist countries, but in reality it is just business as usual between the imperialist countries and the neo-colonies where the capitalists have increased mobility within the imperialist countries.
At this time, the major imperialists are characterized more by interpenetration than by unevenness of opportunity for superexploitation. Social-democrats and linear-minded economists have concluded that Lenin was wrong, because imperialism is not a NET exporter of capital to the Third World. From MIM's point of view, this is a misunderstanding of dialectics. To reach the stage where export of capital is necessary to preserve the profit rate is characteristic of imperialism. There is nothing in dialectics that says the imperialists succeed in exporting their crisis. For capital to come back in the form of profits and super-profits which contribute to further crisis is what we expect from a theory of disequilibrium. The social-democrats always expect stability and so they called Lenin wrong for saying imperialism exports capital, just because there is no net outflow!
The major threats to the interpenetration of imperialist capital on the horizon are NAFTA, the European Union (EU),(63 ) the general rise of capitalism in East Asia, any would-be imperialist excluded from existing trade treaties and possibly NATO depending on how Russian imperialism is handled. The GATT and now its World Trade Organization (WTO) is the one structure for creating treaties binding imperialists together in trade that is the largest continuing force for homogenization. A previous incarnation of the WTO called the ITO failed to be born after World War II, because the U.S. Congress would not ratify it. The stronger the WTO and other international organizations, the more we can say that there is homogenization and a global conflict of the imperialists against the Third World. However, it is important to note that even with a GATT and WTO, the threat of imperialist government tariffs and quotas exist anyway, because the WTO will have no army to enforce its will. This fact colors the very "free trade" negotiations amongst the capitalists, because they would rather accept informal quotas or provide other perks than see a country exclude them completely by tossing aside the GATT. Hence, there are still power issues in trade beyond the preferences of consumers. If one small country gets out of line, there are many others to trade with, but the larger markets are difficult to replace.
The major political forces pushing toward a return to separate spheres of national influence for each imperialism are the labor aristocracies of each country and the bourgeoisie of each country unable to compete on an international plane. The more capital forms one interpenetrating whole complete with pretensions to world government, the more the spokespeople for the labor aristocracy protest--Le Pen, Jospin, fascists, AFL-CIO leaders etc. Likewise, those politicians representing profoundly local capital such as Senator Strom Thurmond, Jesse Helms or Ross Perot, they also complain more and more by asking for protective tariffs and the scotching of GATT, NAFTA etc.(64 ) Local capital stuck in its position of holding fixed assets--"c"--they cannot sell and labor aristocracies everywhere are the direct political pressure for inter-imperialist war. Such pressures for war internally and externally are inevitable under any class society. The bourgeois internationalists' pipe dream of world government and trade without tariffs and taxes will be resisted by those with jobs and property threatened by such an arrangement. World self-government (internationalist harmony) and free trade are only possible under communism.
Meanwhile bourgeois internationalists such as Nelson Rockefeller, Jimmy Carter, George Bush, Bill Clinton, Bob Dole, Francois Mitterand, John Major, Tony Blair and Helmut Kohl--these imperialists share a vision of international imperialist cooperation to exploit first pioneered by arch-revisionist Karl Kautsky. They favor equal opportunity exploitation for people of all countries and they have the momentum in their creation of rudimentary forms of world government.
One of their major difficulties is maintaining their power while keeping the labor aristocracies of their home base countries happy. From the point of view of finance capital, it can jump ship anytime it is invested somewhere there is a loser. Likewise, the free-trade ideologues sponsored by finance capital correctly believe that war occurs when economic losers refuse to compete strictly economically without war. Their only solution is to tell labor aristocracies and failed capitalists everywhere to stay the course and not give up economic competition. The Dean of the Massachusetts Institute of Technology (MIT) Sloan School of Management, Lester C. Thurow is one of those who like Lenin understands the interrelationship of trade and war. His book is titled, "Head to Head: The Coming Economic Battle Among Japan, Europe and America." The first sentence of the book jacket is "The most decisive war of the century is being waged right now. . . and we may have already decided to lose." Thurow tries to explain that it is better to stay in competition than go to war, by which he means inter-imperialist war: "The winner builds the world's best products and enjoys the world's highest standard of living. The loser gets to buy some of those best products--but not as many as the winner. Relative to the military confrontations of the past century, both the winners and the losers are winners in the economic game ahead. Being aggressively invaded by well-made Japanese or German products from firms that intend to conquer American markets is not at all equivalent to the threat of a military invasion."(65 ) "Win or lose," play the game the bourgeois internationalists say and show good sporting behavior.
While the labor aristocracies and uncompetitive national capitalists take up nationalism and lash out in all directions, the bourgeois internationalists focus their energies on holding the lid on those with little capital, which today means the Third World. They will be the ones wanting the UN to intervene in Somalia, Rwanda, Kampuchea and everywhere else the desperately poor resist imperialism. The intervention of the UN in places previously thought not to be appropriate places for intervention by the UN--Somalia, Bosnia, Iraq etc.--reflects the increased interweaving of imperialist capital and the dissolution of both the socialist bloc and its successor social-imperialist bloc. Whereas UN intervention in Korea was the exception of the time, in the future, the UN under bourgeois internationalist leadership will try to make Korea the rule and not the exception. In this agenda of war only on the oppressed nations, the bourgeois internationalists can be assured of a good degree of labor aristocracy support, compared with other aspects of world government opening the labor aristocracy up to competition.
In the same book and page proclaiming the globalization of economics and "economic interdependence among nations," the ruling class think tank the Brookings Institution put forward that "increasing economic integration among nations will continue to erode differences among national economies and undermine the autonomy of national governments."(66 ) Thus the world government and neo-colonial agenda are in the open.
The preponderance of the imperialists being in unity also helps them in imposing trading conditions on the Third World. After the Uruguay round of GATT discussions in 1994 which lowered average industrial tariffs from 6 percent to 4 percent, the imperialists managed to make countries sign all the agreements connected with services and intellectual property--GATS and TRIPS respectively--or they could not join GATT at all.(67 ) Those that do not join GATT face prohibitive tariffs or quotas that set a country at a distinct competitive disadvantage in international trade. In a poor capitalist country, that can mean serious suffering for the people immediately.
The speed at which the imperialists force world government down the labor aristocracy's throat is determined by the degree of class struggle waged in the Third World against imperialism. If there were no violent class struggle between the Third World and the imperialists and a free source of surplus-value from outer space appeared, the imperialists could afford to tread slowly and gently--waiting till the interpenetration of international capital is completely even in terms of national composition. Already it is difficult to know in which country a car in the United $tates was really made, especially when a decomposition into parts is done. In addition, as time passes, the older generations of more chauvinist workers resistant to imperialist homogenization die off and newer generations of workers realizing their dependence on world trade for their labor aristocracy position arise. Nonetheless, the imperialists feel the pressures inherent to capitalist relations of production-pressures which lead to international violence on behalf of international finance capital.
Compared with Lenin's day, 1997 shows one aspect of Kautsky's theory of super-imperialism has become less far-fetched. That aspect is the unification of imperialism and the amelioration of national conflict amongst the imperialist capitals. The end of strict colonialism in which imperialists were iced out of competitor colonies completely has ended. Not to mention trade, massive cross-national investment amongst imperialists has become a reality. For example, in a mere five years between 1988 and 1992, the other imperialists increased their direct investment in the United $tates by over $100 billion or one-third.(68 ) Four bourgeois economists have summed this up nicely:
"Most multinational investment is also directed toward other wealthy countries: in 1985, three-quarters of this stock of foreign assets was located in the industrial countries. The only exception to this pattern is Japan, which held nearly half of its overseas assets in developing countries. Of the $159 billion of private foreign assets located in developing countries, half was in Latin America and close to a third in Asia."(69 ) The economists go on to point out that in the early 1980s, the United States was the place to receive almost 40 percent of all the world's direct investment. The trend of U.S. openness to foreign investment continues and is the most central fact about this era of imperialist bloc dynamics compared with previous ones historically. Seeking to maintain its imperialist top dog position, the U.S. imperialists have essentially told the other would-be competitors that they can have a proportionate share of the super-profits by investing directly in the U.$. economy themselves. Already the profits other imperialists repatriate from the United $tates exceed the profits the U.$. repatriates (which is not to say the U.$. imperialists do not have other ways of transferring value to the United $tates). This is especially appropriate to the bourgeois internationalist way of thinking, because the U.$. is the leading military power. By opening to foreign capital, the United $tates is saying to the other imperialists not to worry about being cut out of business because of military power. In exchange, U.$. imperialism expects support for UN take-over and legitimation of previous U.$. functions against the Third World.
The trend of interweaving of imperialist capital goes along with an acceleration of the gap between the Third World and the imperialist countries, and for this reason, Kautsky's theories are invalid on a grander scale than in Lenin's day. The fact that most investment occurs in the imperialist countries speaks to the decadence of this stage of capitalism where the focus is increasingly on realizing surplus-value and not on production itself. Both the interweaving of imperialist capital and expansion of the labor aristocracy spell the doom of imperialism's viability all the faster, because neither activity generates surplus-value.
There are those who would claim to follow Marx and not Lenin that say that Lenin was wrong about finance capital being the dominant sector of imperialism. These anti-Leninists are wrong, because no industrial capitalist can avoid the competition engendered by banking capital's activities, and because as Poulantzas points out, it is wrong to separate industrial and banking capital. The only exceptions are those commodity-producing capitalists about to go out of business. For that matter, the CEOs and treasurers of industrial corporations have increasingly taken on direct functions of banking capital and not industrial capital. Marston shows how IBM actually pioneered the exchange rate swap future by which fluctuations in exchange rates are eliminated in cross-country operations. Other companies are known for buying companies not because they have anything to do with their own line of business, but simply because they are profitable. Moreover, Marston has shown that industrial corporations internationally float their own bonds increasingly based on their future profit flows, so industrial capital is thus converted to liquid forms of finance capital. Bankers who refuse to assist with the creation of liquidity for industrial capital simply lose the business to other bankers. Bankers think like treasurers and treasurers think like bankers to such a degree it is meaningless to draw the distinction, except in Japan where the government has consciously empowered the industrial capital side of finance capital. This should be thought of as a faction of finance capital's thinking on competition. Other finance capitalists also compete for market share, just by less conscious design.
The United $tates is especially oriented toward finance capital, relative to industrial capital. Citing Dean Baker of the Economic Policy Institute, William Greider also shows that industrial capital in the United $tates has increasingly lost its power to finance capital. "The retained earnings that corporations traditionally held for future capital investments had declined drastically as a percentage of profits since the 1970s. Corporate profits were 34 percent of corporate debt in 1960; by 1990, profits were only 15 percent of debt. In that sense, the corporate managers had lost real power--the power to make capital decisions on their own, independent of the discipline from financial markets."(70 ) When in July, 1984 ITT announced "it was cutting its dividend by nearly two-thirds so that it could afford heavy investments in the U.S. telecommunications business, the stock price dropped by roughly a third in one day, making ITT a prime takeover target."(71 ) Numerous CEOs have been fired for similar reasons. The average return to bondholders is now in the 8 percent range, which is five times the average for the century according to Greider, and despite this in the last several years central bankers everywhere are doing what they can to make credit tight and expensive. In fact, if it were not for interest payments to bond-holders, the U.$. government would be running a budget surplus of $100 billion in 1996. This also means that central bankers are deliberately causing budget deficits as a political means of forcing savings, putting pressure on the welfare state and stimulating the spirits of bond-holders. (72 ) MIM agrees with Greider that we do not care about the budget deficits. Let the bondholders not be paid. That would be a redistribution of wealth. Cutting interest rates and taxing the return on bonds is an example of a progressive reform, but capitalism might not be able to sustain it, because there might not be enough reason within the system for saving or investment to occur. On the other hand, to continue to pay the bondholders is to choke the economy. The power of bond-holders today could be no greater vindication of Lenin's theory of imperialism as the highest stage of capitalism and dominated by finance capital.
Other limitations with regard to Kautskyian and bourgeois globalization theory are numerous. Russian and Chinese imperialism are the most concrete manifestations of contradictions for the integration of finance capital. Most bourgeois economists will admit that labor is not free to cross borders, and hence is not a "mobile factor" in a global free market. Thus we say there is no globally integrated market for labor-power.(73 ) Moreover, it is true that imperialist capital can now penetrate pretty much every nook and cranny, but we would prefer to limit talk of finance capital integration to discussion of the imperialist countries. The meaning of counting the Third World as integrated into finance capitalism is clouded by the stunted development of a bourgeoisie in the Third World. While it is true that imperialists may be able to borrow money to use in a Third World country, and occasionally at the international going rate, it would be difficult to describe under what circumstances the national bourgeoisie of the Third World would be able to do the same thing.(74) We limit our conclusion to saying that the vast preponderance of imperialist capital is integrated and this is a new and important development fully conforming to Lenin's theses.
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