monopoly capitalism

The Jews and Europe

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Max Horkheimer
Zeitschrift für Sozialforschung
December 1939

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Whoever wants to explain anti-Semitism must speak of National Socialism. Without a conception of what has happened in Germany, speaking about anti-Semitism in Siam or Africa remains senseless. The new anti-Semitism is the emissary of the totalitarian order, which has developed from the liberal one. One must thus go back to consider the tendencies within capitalism. But it is as if the refugee intellectuals have been robbed not only of their citizenship, but also of their minds. Thinking, the only mode of behavior that would be appropriate for them, has fallen into discredit. The “Jewish-Hegelian jargon,” which once carried all the way from London to the German Left and even then had to be translated into the ringing tones of the union functionaries, now seems completely eccentric. With a sigh of relief they throw away the troublesome weapon and turn to neohumanism, to Goethe’s personality, to the true Germany and other cultural assets. International solidarity is said to have failed. Because the worldwide revolution did not come to pass, the theoretical conceptions in which it appeared as the salvation from barbarism are now considered worthless. At present, we have really reached the point where the harmony of capitalist society along with the opportunities to reform it have been exposed as the very illusions always denounced by the critique of the free market economy; now, as predicted, the contradictions of technical progress have created a permanent economic crisis, and the descendants of the free entrepreneurs can maintain their positions only by the abolition of bourgeois freedoms; now the literary opponents of totalitarian society praise the very conditions to which they owe their present existence, and deny the theory which, when there was still time, revealed its secrets.

No one can demand that, in the very countries that have granted them asylum, the émigrés put a mirror to the world that has created fascism. But whoever is not willing to talk about capitalism should also keep quiet about fascism. The English hosts today fare better than Frederick the Great did with the acid-tongued Voltaire. No matter if the hymn the intellectuals intone to liberalism often comes too late, because the countries turn totalitarian faster than the books can find publishers; the intellectuals have not abandoned hope that somewhere the reformation of Western capitalism will proceed more mildly than in Germany and that well-recommended foreigners will have a future after all. But the totalitarian order differs from its bourgeois predecessor only in that it has lost its inhibitions. Just as old people sometimes become as evil as they basically always were, at the end of the epoch class rule has taken the form of the “folk community” [Volksgemeinschaft]. The theory has destroyed the myth of the harmony of interests [between capital and labor]; it has presented the liberal economic process as the reproduction of power relations by means of free contracts, which are compelled by the inequality of the property. Mediation has now been abolished. Fascism is that truth of modern society which has been realized by the theory from the beginning. Fascism solidifies the extreme class differences which the law of surplus value ultimately produced.

volksgemeinschaft

No revision of economic theory is required to understand fascism. Equal and just exchange has driven itself to the point of absurdity, and the totalitarian order is this absurdity. The transition from liberalism has occurred logically enough, and less brutally than from the mercantile system into that of the nineteenth century. The same economic tendencies that create an ever higher productivity of labor through the mechanism of competition have suddenly turned into forces of social disorganization. The pride of liberalism, industry developed technically to the utmost, ruins its own principle because great parts of the population can no longer sell their labor. The reproduction of what exists by the labor market becomes inefficient. Previously the bourgeoisie was decentralized, a many-headed ruler; the expansion of the plant was the condition for every entrepreneur to increase his portion of the social surplus. He needed workers in order to prevail in the competition of the market. In the age of monopolies, the investment of more and more new capital no longer promises any great increase in profits. The mass of workers, from whom surplus value flows, diminishes in comparison to the apparatus which it serves. In recent times, industrial production has existed only as a condition for profit, for the expansion of the power of groups and individuals over human labor. Hunger itself provides no reason for the production of consumer goods. To produce for the insolvent demand, for the unemployed masses, would run counter to the laws of economy and religion that hold the order together; no bread without work.

Even the façade betrays the obsolescence of the market economy. The advertising signs in all countries are its monuments. Their expression is ridiculous. They speak to the passers-by as shallow adults do to children or animals, in a falsely familiar slang. The masses, like children, are deluded: they believe that as independent subjects they have the freedom to choose the goods for themselves. But the choice has already largely been dictated. For decades there have been entire spheres of consumption in which only the labels change. The panoply of different qualities in which consumers revel exists only on paper. If advertising was always characteristic of the faux frais of the bourgeois commodity economy, still, it formerly performed a positive function as a means of increasing demand. Today the buyer is still paid an ideological reverence which he is not even supposed to believe entirely. He already knows enough to interpret the advertising for the great brand-name products as national slogans that one is not allowed to contradict. The discipline to which advertising appeals comes into its own in the fascist countries. In the posters the people find out what they really are: soldiers. Advertising becomes correct. The strict governmental command which threatens from every wall during totalitarian elections corresponds more exactly to the modern organization of the economy than the monotonously colorful lighting effects in the shopping centers and amusement quarters of the world.

The economic programs of the good European statesmen are illusory. In the final phase of liberalism they want to compensate with government orders for the disintegrating market economy’s inability to support the populace. Along with the economically powerful they seek to stimulate the economy so that it will provide everyone with a living, but they forget that the aversion to new investments is no whim. The industrialists have no desire to get their factories going via the indirect means of taxes they must pay to an all-too-impartial government simply to help the bankrupt farmers and other draft animals out of a jam. For their class such a procedure does not pay. No matter how much progovernmental economists may lecture the entrepreneurs that it is for their own benefit, the powerful have a better sense of their interests and have greater goals than a makeshift boom led with strikes and whatever else belongs to the proletarian class struggle. The statesmen who, after all this, still wish to run liberalism humanely, misunderstand its character. They may represent education and be surrounded by experts, but their efforts are nonetheless absurd: they wish to subordinate to the general populace that class whose particular interests by nature run contrary to the general ones. A government that would make the objects of welfare into subjects of free contracts by garnering the taxes of employers, must fail in the end: otherwise it would involuntarily degenerate from the proxy of the employers into the executive agency of the unemployed, indeed, of the dependent classes in general. Nearly confiscatory taxes, such as the inheritance tax, which are forced not only by the layoffs in industry, but also by the insoluble agriculture crisis, already threaten to make the weak into the “exploiters” of the capitalists. Such a reversal of circumstances will not be permitted in the long run by the employers in any empire. In the parliaments and all of public life, the employers sabotage neoliberal welfare policies. Even if these would help the economy, the employers would remain unreconciled: economic cycles are no longer enough for them. The relations of production prevail against the humanitarian governments. The pioneers from the employers’ associations create a new apparatus and their advocates take the social order into their hands; in place of fragmented command over particular factories, there arises the totalitarian rule of particular interests over the entire people. Individuals are subjected to a new discipline which threatens the foundations of the social order. The transformation of the downtrodden jobseeker from the nineteenth century into the solicitous member of a fascist organization recalls in its historical significance the transformation of the medieval master craftsman into the protestant burgher of the Reformation, or of the English village pauper into the modern industrial worker. Considering the fundamental nature of this change, the statesmen pursuing moderate progress appear reactionary.

b_250241 Berlin, Ged‰chtnisfeier f¸r Rathenau

The labor market is replaced by coerced labor. If over the past decades people went from exchange partners to beggars, objects of welfare, now they become direct objects of domination. In the prefascist stage the unemployed threatened the order. The transition to an economy which would unite the separated elements, which would give the people ownership of the idle machines and the useless grain, seemed unavoidable in Germany, and the world-wide danger of socialism seemed serious. With socialism’s enemies stood everyone who had anything to say in the Republic. Governing was carried out by welfare payments, by former imperial civil servants, and by reactionary officers. The trade unions wished to transform themselves from organs of class struggle into state institutions which distribute governmental largesse, inculcate a loyal attitude in the recipients, and participate in social control. Such help, however, was suspect to the powerful. Once German capital had resumed imperialist policies, it dropped the labor bureaucrats, political and trade unions, who had helped it into power. Despite their most honest intentions, the bureaucrats could not measure up to the new conditions. The masses were not activated for the improvement of their own lives, not to eat, but to obey — such is the task of the fascist apparatus. Governing has acquired a new meaning there. Instead of practiced functionaries, imaginative organizers and overseers are needed; they must be well removed from the influence of ideologies of freedom and human dignity. In late capitalism, peoples metamorphose first into welfare recipients and then into followers [Gefolgschaften].

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On the Historical Specificity of the Marxist Theory of Imperialism

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Nikolai Bukharin

Grigorii Zinoviev

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If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism. Such a definition would include what is most important, for, on the one hand, finance capital is the bank capital of a few very big monopolist banks, merged with the capital of the monopolist associations of industrialists; and, on the other hand, the division of the world is the transition from a colonial policy which has extended without hindrance to territories unseized by any capitalist power, to a colonial policy of monopolist possession of the territory of the world, which has been completely divided up.

— Vladimir Lenin, Imperialism, the Highest Stage of Capitalist Development, from Lenin: Collected Works, Volume 22, pg. 266 (1915)

Modern imperialism is the social-economic policy of finance capital tending toward the creation of the most comprehensive economic territorial entities and world empires possible. It is characterized by the tendency to supplant free trade decisively with the system of protective tariffs and to subordinate economic life completely to the great monopolistic combines, such as the trusts, cartels, banking consortia, etc. Imperialism signifies the highest stage in the development of capitalism, in which not only commodity exports but capital exports as well occupy a place of quintessential importance. It characterizes an epoch in which the world is partitioned among a few great capitalist powers and in which the struggle proceeds along the lines of repartitioning it and partitioning the remaining areas.

— Grigorii Zinoviev, “What is Imperialism?” (1916)

The historian or economist who places under one denominator the structure of modern capitalism, i.e., modern production relations, and the numerous types of production relations that formerly led to wars of conquest, will understand nothing in the development of modern world economy.  One must single out the specific elements which characterise our time, and analyse them.  This was Marx’s method, and this is how a Marxist must approach the analysis of imperialism.  We now understand that it is impossible to confine oneself to the analysis of the forms, in which a policy manifests itself; for instance, one cannot be satisfied with defining a policy as that of “conquest,” “expansion,” “violence,” etc.  One must analyse the basis on which it rises and which it serves to widen.  We have defined imperialism as the policy of finance capital.  Therewith we uncovered the functional significance of that policy.  It upholds the structure of finance capital; it subjugates the world to the domination of finance capital; in place of the old pre-capitalist, or the old capitalist, production relations, it put the production relations of finance capital.  Just as finance capitalism (which must not be confused with money capital, for finance capital is characterised by being simultaneously banking and industrial capital) is an historically limited epoch, confined only to the last few decades, so imperialism, as the policy of finance capital, is a specific historic category.

— Nikolai Bukharin, Imperialism and World Economy, pg. 114 (1917)

Modern imperialism is not the prelude to the expansion of capital, as in Bauer’s model; on the contrary, it is only the last chapter of its historical process of expansion: it is the period of universally sharpened world competition between the capitalist states for the last remaining non-capitalist areas on earth. In this final phase, economic and political catastrophe is just as much the intrinsic, normal mode of existence for capital as it was in the ‘primitive accumulation’ of its development phase. The discovery of America and the sea route to India were not just Promethean achievements of the human mind and civilization but also, and inseparably, a series of mass murders of primitive peoples in the New World and large-scale slave trading with the peoples of Africa and Asia. Similarly, the economic expansion of capital in its imperialist final phase is inseparable from the series of colonial conquests and World Wars which we are now experiencing. What distinguishes imperialism as the last struggle for capitalist world domination is not simply the remarkable energy and universality of expansion but — and this is the specific sign that the circle of development is beginning to close — the return of the decisive struggle for expansion from those areas which are being fought over back to its home countries. In this way, imperialism brings catastrophe as a mode of existence back from the periphery of capitalist development to its point of departure. The expansion of capital, which for four centuries had given the existence and civilization of all non-capitalist peoples in Asia, Africa, America and Australia over to ceaseless convulsions and general and complete decline, is now plunging the civilized peoples of Europe itself into a series of catastrophes whose final result can only be the decline of civilization or the transition to the socialist mode of production. Seen in this light, the position of the proletariat with regard to imperialism leads to a general confrontation with the rule of capital. The specific rules of its conduct are given by that historical alternative.

According to official ‘expert’ Marxism, the rules are quite different. The belief in the possibility of accumulation in an ‘isolated capitalist society’, the belief that capitalism is conceivable even without expansion, is the theoretical formula of a quite distinct tactical tendency. The logical conclusion of this idea is to look on the phase of imperialism not as a historical necessity, as the decisive conflict for socialism, but as the wicked invention of a small group of people who profit from it. This leads to convincing the bourgeoisie that, even from the point of view of their capitalist interests, imperialism and militarism are harmful, thus isolating the alleged small group of beneficiaries of this imperialism and forming a bloc of the proletariat with broad sections of the bourgeoisie in order to ‘moderate’ imperialism, starve it out by ‘partial disarmament’ and ‘draw its claws’! Just as liberalism in the period of its decline appeals for a well-informed as against an ill-informed monarchy, the ‘Marxist center’ appeals for the bourgeoisie it will educate as against the ill-advised one, for international disarmament treaties as against the disaster course of imperialism, for the peaceful federation of democratic nation-states as against the struggle of the great powers for armed world domination. The final confrontation between proletariat and capital to settle their world-historical contradiction is converted into the utopia of a historical compromise between proletariat and bourgeoisie to ‘moderate’ the imperialist contradictions between capitalist states.

— Rosa Luxemburg, Anti-Critique (1915)

My reason for citing the above excerpts is that I feel that the Marxist theory of imperialism — as developed by Rudolf Hilferding, Rosa Luxemburg, Vladimir Lenin, Grigorii Zinoviev, and Nikolai Bukharin — has been widely abused in recent decades in analyzing the intervention of advanced capitalist states (the U.S. or members of the European Union) into less developed countries.  While there can be no doubt that there exist some parallels and continuities between the kind of self-interested exploitation of Third World countries, typically ex-colonies, that takes place today and the imperialism of old, these theorists understood it as a specific outgrowth of monopoly or finance capitalism.  If I might be permitted to grant this phase of capitalism a periodicity, I would probably place it between 1880-1929.  Since this time, capitalism has undergone not one but two drastic reconfigurations (Fordism and neoliberalism).  For this reason, I think that the term should not be so loosely thrown around in describing current affairs, as many of these categories need to be reworked to fit the present day.

There are many fundamental differences between the phenomenon Lenin et al. described as “imperialism” and what has more recently been dubbed “imperialism” (or, perhaps more fittingly, “neo-imperialism”).

Lenin understood imperialism to entail a certain underlying logic, the bloody competition between great capitalist powers to carve up the earth according to zones of influence and direct colonial administration in pursuit of new markets, raw materials, and cheap labor.  Moreover, he believed that this competition between the great capitalist powers of the world, which were at the time mostly European but also included Japan and the United States, would escalate to the point where an inter-imperialist war, by definition a world war, was inevitable.  This was a multipolar world, in which no one great power could be said to predominate completely, and in which large-scale alliances were formed in anticipation of major conflict that everyone knew was on the horizon.  Also, imperialism constituted the logical outgrowth of the shift from liberal capitalism, where the prevailing Manchester School ideology of “free markets” dominated and liberalism (quite contrary to its historical aspirations) held the reigns of state power, from 1848-1873, to monopoly or finance capitalism, where smaller competitors were gradually pushed out as major trusts swallowed up their rivals and cut deals with the governments in order to corner the market in the aftermath of the “long crisis” of 1873.

What leftists generally understand imperialism to mean today is the more or less cooperative domination of either the single world superpower, the US, or in tandem with its various allies in NATO (another Cold War holdover) or the UN.  While military occupations clearly last over years of bloody conflict, the point is not direct colonial administration but the indirect establishment of quasi-independent regimes that will be “friendly” to US or European interests.  No one really believes that these various military interventions around the world are actually going to lead to an armed conflict between, say, the European Union and the US, or between Russia and the US, or even China and the US.  After the collapse of the Soviet Union, there has been a decidedly unipolar order.  In terms of concurrent transformations in the organic composition of capital and the corresponding historical periodicities of capitalism, we seem to have reverted to a “neoliberal” valorization of free markets and the deregulation of capital flows.  There is some debate as to whether neoliberalism is merely an ideological pretext that masks deep complicity with state powers, or whether it is a socioeconomic reality, but clearly the form of capitalism that Lenin felt specifically motivated imperialism in his time does not exist today.

A Study of the Marxist (and Non-Marxist) Theory of Imperialism

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The Death of Global Imperialism (1920s-1930s)

As part of my study of the spatial dialectics of capitalism, I have been reading not only the more recent Marxist literature by Henri Lefebvre on The Production of Space or David Harvey’s excellent Spaces of Capital, but also some of the more classic works on the subject.

Marx’s own account of the spatiality of capitalism can be found in the Manifesto of the Communist Party, his Grundrisse of the early 1860s, and his posthumously published Capital, Volume II.  In the Manifesto, he talks at length in the first section of the globality of capitalism, of the formation of the world-market as part of the historical mission of the bourgeoisie.  In the latter two works I mentioned, the spatial dimension of capital is raised in connection with the ever-improving means of transport and communication, in facilitating the circulation of commodities.  Marx explains the dynamic in capitalism by which it breaks through every spatial barrier that it comes across, such that it seems to embody a sort of terrestrial infinity realizing itself through time.

But I am interested in some of the later work that was done on the Marxist theory of imperialism, both before and immediately after the 1917 Revolution.  This would have an obvious bearing on the spatial extension of capitalism throughout the world.  In this connection, I have drawn up a brief reading list:

  1. John Atkinson Hobson.  Imperialism: A Study (1902).  Though a pacifist and political liberal, Lenin considered his study of imperialism vastly superior to Kautsky’s, which had by then joined forces with the bourgeois apologists.
  2. Rudolf Hilferding.   Finance Capital: A Study of the Latest Phase of Capitalist Development (1910).  This book was extremely influential in its time, and established a number of concepts regarding monopoly capitalism and finance capital that Lenin would later rely upon.  The two chapters on “The Export of Capital” and “The Proletariat and Imperialism” are relevant to any study on imperialism.
  3. Rosa Luxemburg.  The Accumulation of Capital (1913).  This is Luxemburg’s greatest contribution to the economic theory of Marxism.  Though she and Lenin disagreed over some of its premises and conclusion, the book remains extremely important for the analysis of imperialism.  The chapter on “Foreign Loans” addresses this directly.
  4. Vladimir Lenin.  Imperialism, the Highest Stage of Capitalist Development (1915-1916).  This work scarcely needs any introduction.  The entire book is a study of imperialism as a stage in capitalist development.
  5. Nikolai Bukharin.  Imperialism and World Economy (1917).  This book, which includes a favorable introduction from Lenin, seems to me to perhaps be the most pertinent to my own studies, since it places the “world economy” as  a centerpiece for its analysis.

I am hoping perhaps a few of my Marxist friends will join me in reading some selections of these books.  In my understanding of the subject, the imperialism described by Hilferding, Luxemburg, Lenin, and Bukharin were very specific to the time in which they were living.  According to their theories, it involved vast capitalist trusts and cartels, gigantic monopolies, along with huge amounts of finance capital backing them through the banks.  I think that Lenin’s theory of imperialism is all too often invoked in describing present-day imperialist ventures.  It continues to be a force within the greater complex of capitalist globalization, which has been taking place ever since the social formation first emerged.  But historical conditions have changed since Lenin’s time, and in light of the neo-liberalist recalibration of capitalism, I think some of the fundamental categories we retain from Lenin’s analysis of imperialism might have to be rethought or slightly modified to accommodate present-day realities.

I personally am interested in the historical imperialism that Lenin et al. were studying, i.e. the form of imperialism that existed between 1880 and 1939.  Are there any other suggestions for reading on this subject? Ren, I’m looking to you.  But others are welcome to make suggestions as well.