By David Harvey
John Smith is lost in the desert and dying for water. His trusty GPS system tells him there is fresh water ten miles to the East. Since he believes ‘for East to West’ one should ‘read South to North,’ he heads off to the South never to be seen again. This is alas the quality of the argument he makes against me.
The East whereof I speak when I comment that wealth has moved from West to East in recent times, is constituted by China, now the second largest economy in the world (if Europe is not considered as one economy) followed by Japan as the third largest economy. Add in South Korea, Taiwan and (with a bit of geographical license) Singapore and you have a power block in the global economy (once referred to as the ‘flying geese’ model of capitalist development) that now accounts for roughly a third of total global GDP (compared to North America that now accounts for just over a quarter). If we look back at the world as it was ordered in, say, 1960, then the astonishing rise of East Asia as a power center of global capital accumulation will be blindingly obvious.
The Chinese and the Japanese now own large chunks of a spiraling US government debt. There has also been an interesting sequence of each national economy in East Asia taking its turn in searching out a spatial fix for the massive amounts of surplus capital being accumulated within their borders. Japan began capital export in the late 1960s, South Korea in the late 1970s, Taiwan in the early 1980s. A lot of that investment went to North America and Europe.
Now it is China’s turn. A map of Chinese foreign investment in 2000 was almost totally empty. Now a flood of it is passing not only along the ‘One Belt One Road’ through Central Asia into Europe, but also throughout East Africa in particular and into Latin America (Ecuador has more than half its foreign direct investment from China). When China invited leaders from around the world to attend a One Belt One Road conference in May of 2017, more than forty world leaders came to listen to President Xi enunciate what many there saw as the initiation of a new world order in which China would be a (if not the) hegemonic power. Does this mean China is the new imperialist power?
There are interesting micro-features to this scenario. When we read accounts of awful super-exploitative conditions in manufacturing in the global South it often transpires that it is Taiwanese or South Korean firms that are involved even as the final product finds its way to Europe or the United States. Chinese thirst for minerals and agricultural commodities (soy beans in particular) means that Chinese firms are also at the center of an extractivism that is wrecking the landscape all around the world (look at Latin America). A cursory look at land grabs all across Africa shows Chinese companies and wealth funds are way ahead of everyone else in their acquisitions. The two largest mineral companies operating in Zambia’s copper belt are Indian and Chinese.
So, what does the fixed, rigid theory of imperialism to which John Smith appeals have to say about all of this?
According to John Smith I failed to take up the question of imperialism in The Limits to Capital. I mentioned it only once, he says. The index records some 24 mentions and the last chapter is entitled “the dialectics of imperialism.” It is perfectly true that I there found the traditional conception of imperialism derived from Lenin (and subsequently set in stone by the likes of John Smith) inadequate to describe the complex spatial, interterritorial and place-specific forms of production, realization and distribution that were going on around the world.
In this I was later intrigued to find a fellow spirit in Giovanni Arrighi who in The Geometry of Imperialism (written around the same time) abandons the concept of imperialism (or for that matter the rigid geography of core and periphery set out in world systems theory) in favor of a more open and fluid analysis of shifting hegemonies within the world system. Neither of us deny that value produced in one place ends up being appropriated somewhere else and there is a degree of viciousness in all of this that is appalling. This is, however, the process (and I emphasize the significance of ‘process’) we endeavor to chart, to uncover and to theorize as best we could. Marx taught us that the historical materialist method does not start with concepts and then imposes them on reality, but with the realities on the ground in order to discover the abstract concepts adequate to their situation. To start with concepts, as does John Smith, is to engage in rank idealism.
So, on the basis of what is happening on the ground, I prefer to work with a theory of uneven geographical development, proliferating and differentiating divisions of labour, an understanding of global commodity chains and spatial fixes, of place production (urbanization in particular – a vital topic of which John Smith is oblivious) and the construction and destruction of regional economies within which a certain ‘structural coherence’ (or ‘regional value regime’) might form for a time, until powerful forces of devaluation and of accumulation through dispossession set in motion the forces of creative destruction. These forces affect not only what is happening in the global South but also in the deindustrializing North.
I try to look at this carefully through the prism of the differential geographical mobilities of capital, labour, money and finance and to look at the rising power of rentiers and the shifting power balance between various faction of capital (e.g. between production and finance) as well as between capital and labour. This is what I substitute for the crude and rigid theory of imperialism that John Smith espouses. It does not deny the immense accumulation of money power taking place within the hands of a few corporations and a few wealthy families or the dreadful conditions of life to which much of the world’s population is reduced. But it does not imagine that the working classes of Ohio and Pennsylvania are living in the lap of luxury either. It acknowledges the significance of Marx’s theory of relative surplus value which makes it possible for the physical standard of living of labour to rise significantly even as the rate of exploitation increases to dramatic levels impossible to achieve through the absolute surplus value gained in the more impoverished arenas of capital accumulation that often dominate in the global South. Furthermore, as Marx long ago pointed out, geographical transfers of wealth from one part of the world to another do not benefit a whole country; they are invariably concentrated in the hands of privileged classes. In recent times in the United States the Wall-Streeters and their hangers-on have done splendidly while the erstwhile workers of Michigan and Ohio have done very badly.
Let us look backwards on all of this. In the 1960s privileged sectors of the working class were largely protected within the boundaries of their nation states in the global North and could strive for political power within their space. They achieved welfare states through tactics of social democracy and received some of the benefits that came from rising productivity. The capitalist counter was to try to weaken that power and bring wages down by encouraging immigration. The Germans looked to Turkey, the French to the Maghreb, the Swedes to Yugoslavia, the British to its erstwhile colonies and the US reformed its immigration laws in 1965 to open to the whole world. John Smith forgets that this was all subsidized by the capitalist state at the behest of the capitalist class. But that solution did not work. So, from the 1970s onwards some (but by no means all) capital went to where the labour forces were cheapest. But globalization could not work without reducing barriers to commodity exchange and money flows and the latter meant opening a Pandora’s box for finance capital that had long been frustrated by national regulation. The long-term effect was to reduce the power and privilege of working class movements in the global north precisely by putting them into competitive range of a global labour force that could be had at almost any price. I stand by the claim that the working classes within the global structure of contemporary capitalism are far more competitive with each other now than they were in the 1960s.
At the same time, technological change has been making labour less important in many spheres of economic activity (e.g. Google and Facebook). While new structures connecting the intellectual and organizational labour of the global north with the manual labour of the global south have by-passed traditional working-class power in the global north leaving behind a desolate landscape of deindustrialization and unemployment to be exploited by whatever other means possible.
One final comment that typifies the kind of polemic that Smith engages in as a substitute for reasoned critique. He mocks at the way I supposedly ‘pine for‘ a return to ’a more benevolent New Deal imperialism’ in The New Imperialism. The context shows that I was saying this was the only possible path within a capitalist mode of production. At that time (2003) it was clear that there was no global working-class movement that was remotely able to define an alternative to capitalism and that capitalism was headed for a nasty shock of the sort that occurred in 2007-8 (yes, I clearly predicted the likelihood of that in The New Imperialism in 2003). Given that the subsequent predictable crisis was resolved by further dispossessing whole populations of much of their wealth and asset values, then I think it would have been better for the left then to support a Keynesian alternative (which was, incidentally, later implemented by China).
This was, in my political judgment at that time, the only way that a breathing space could be created for the left to offset the drift, at that time clearly laid out by the neoconservative movement, for a violent militaristic and super-exploitative solution that echoed what happened in the lead-up to World War 2. I think in retrospect I was right in this even though I recognize that many will disagree with me. This dilemma is, alas, still with us. But reasoned critique is one thing and needlessly mocking polemics is another.
David Harvey is the Distinguished Professor of anthropology and geography at the Graduate Center of the City University of New York.
Featured Photograph: David Harvey speaking on Subversive Festival 2013 in Zagreb.
I agree with Harvey’s conception of global capitalism being much more complicated in the post-WWII era, and I think it’s certainly incorrect to have a rigid Global North vs. Global South understanding of imperialism. It’s also important to note that even Lenin understood the historical context of what he understood to be imperialism. My only gripe with Harvey is that he never reaches revolutionary conclusions even though he’s able to go into detail in regards to the fluctuations and perils of capitalism. Although it’s true that the more revolutionary movements in North America and Europe might still be small, that certainly isn’t the case in India or the Philippines where there are significantly large Maoist struggles currently in motion. Why would Keynesianism ever be the solution for a system that even he admits is fundamentally flawed? Keynesianism certainly wasn’t able to defend itself against neo-liberalism due to it’s functioning within the bounds of capitalism. As a fan of Harvey’s analyses, I’ve always found that to be somewhat intellectually dishonest. It’s certainly not easy to propose a more revolutionary outlook, but Marx certainly wasn’t afraid of doing so. Why don’t we accept that capitalism in any form no longer deserves to be around while supporting revolutionary socialist/communist organizations that are also learning from the mistakes of the Soviet Union and China in their revolutionary era’s?
Sir, regarding India there is no People’s revolution so far. Maoist groups in India tried to replicate Chinese revolution in a crude way (forming armed squads from the tribal regions which are predominantly either 18th century productive relations) activity would not be considered as revolution. Indian Maoist groups never gained popular base among urban and countryside. They believe that still India is a semi feudal country, therefore Chinese revolutionary model suits to India.
Thank you for this debate! I think it is misleading to look at the challenge to US hegemony as refutation of imperialism. There has always been contestation and fluidity in the hierarchy of imperialists, but there remain those countries where the relation is clear. The defining feature of imperialism is that it is a form of increased economic extraction (or super exploitation) that is both politically and economically imposed: the imperialists have more capital and, relatedly, political power. As before, many African and South Asian countries remain subject to (a) unequal global political institutions (WTO trade regulations, UN Security Council military threat), (b) dispossession of public goods during times of crisis, and (c) vertical integration of labour and natural resources that are “underpaid” in terms of the wealth accruing to the dominated country – to mention just three mechanisms that increase surplus extraction by imperialist countries. It seems empirically and conceptually straightforward to me to say that capital has historically gathered within some territories (as you say), and now acts collectively (politically and economically) to underdevelop other territories, so as to extract more surplus and to prevent the rise of competitive capitals within those regions. And, as you have argued too, it seems plausible that workers in advanced countries have leveraged their higher relative access to the political regime of the dominating capitals (especially in a democracy) to bargain for higher living standards. Stark differences in living standards attest to this (I think it’s hard to argue that advanced country workers are proportionately more productive, and even then imperialism does not only talk to the rate of exploitation but more broadly to underdevelopment).
David Harvey bases his argument on the idea that following Lenin’s take on imperialism is the worst kind of idealism that is possible. When he analyses the changing landscapes of global capital, he actually ignores in its entirety the role of cultural capital and a host of other forms of capital. If we think even for a moment about where research, patents, new ideas and ideologies are born and nurtured, we see immediately how offensively improbable his argument is, especially on his idea that “roles have reversed.” Where are the millions of foreign students that pay the equivalent of hundreds of years of local wages, for a semester at a university in the PRC, or even in Japan? Even Japan and Korea woo talented students with scholarships from less fortunate countries, not to mention China or the others (China just started employing foreign professors and is in a frenzy to get foreign students by offering scholarships). Are Chinese degrees capital investments? No they are not. China is an absolute newcomer to the game of how cultural capital works in the modern world – and how work innovation, R&D, global fashion etc. Is this idealism? Absolutely not: innovation and the knowledge economy is more central to today’s world than the question where our hardware is manufactured. Another pertinent issue with Harvey’c critique of Smith is his (similar) lack of chronological context when he discusses the plight of Western workers and generally the Western subaltern. The Western worker or unemployed person does not live on the lap of luxury: this is granted. However, many Western unemployed have access to food (in the form of food stamps or unemployment benefits), and many have health coverage. Compare this with Hungary (a semi-peripheral economy) where there are no unemployment benefits, and the peripheral economies of Asia and Africa, where people live in constant fear of hunger (except elites). When it comes to Harvey’s ‘new imperialists’: Singapore for one has no unemployment benefits at all (and treats this problem as part and parcel of its promotion of family values and ‘responsibility’ etc.) I am discussing individuals’ food security here: people are fed even in exploitative and privately owned US prisons, whereas they are not fed even in state prisons in many countries of the South and East (!!) where relatives are expected to bring in food for inmates or else the convict dies of hunger. It is absurd to compare the status of the Western proletariat (and precariat, and lumpenproletariat, and peasantry, and single women, and the elderly) in core Western countries and outside those countries. Even if a Western unemployed person is materially poorer than a Southern or Eastern unemployed person, the former owns (in a very immediate sense) a passport that is worth literally dying for (as African migrants, and Asian migrants, demonstrate day to day, tragically). Thus, it is not Smith but David Harvey, who is thinking in an idealist way, when mistaking money flows and production flows for Imperial standing. When the wretched of the Earth die to reach the shores of the PRC at sea, and NOT Australia, then I will be ready to follow Harvey’s take on imperialism to the extent that ‘reversing the roles has started.’ But when legal protections, simple food security, as well as access to knowledge and innovation are as unequally distributed as they are today, it may well take decades or a century to talk of roles ‘already reversed.’ Importantly, at that point, this discourse would take place in Mandarin, and not English, had the ‘roles been already reversed’ (the author of this comment is from Hungary). Until then, as the Godfather says: that is ‘just finance’, and David Harvey, a giant of Marxist thought, is making a colossal error in judgement.
Adam: I appreciate your input, but I think you are off point.
First, Harvey is obviously not arguing against the simple fact that the United States and Australia are wealthier than Hungary, Ecuador, or China. They are obviously wealthier, and as if it needed to be said, Harvey happens to say so explicitly in this post. The question is whether or not this relative wealth has to do with imperialism, and if so, what sort of imperialism.
Second, I think you need to reflect upon the illustration you use to claim that people in the US are pretty well off: they get food in prison! Per capita, the US has four to six times as many people incarcerated as Hungary, Ecuador, or China (see World Prison Brief data on prisonstudies.org). When you account for black men in prison in the United States, the gains black Americans are supposed to have made over the last five decades are erased. Who benefits from imprisoning massive populations such as these? The prisoners who have food?! Of course not. Of course it’s good for the prisoners that they have food, but to chalk this up as a benefit afforded them by U.S. imperialism, or by anything else, is really perverse.
I think the core question here is, what does John Smith mean by imperialism, and can his theory be used to explain systemic inequalities in the world today? Your response, for all of its humanity and passion, has nothing to do with that question. That systemic inequalities exist in the world today does not prove that they are the result of Smith’s imperialism.
Thank you for your comment, David! Smith’s understanding of imperialism comes out of a tradition that has shown consistency and produced results (in terms of research findings and also in terms of actual revolutions that were won) from the early 20th century up to this day. Harvey’s elegant and grand re-assessment is what it is: a re=assessment that draws our attention to the changing geographies of global capital. I think he noticed very pertinent issues but ignored their relative importance on the ground. He focused on spatial matters but not on where we are within a possible timeline (of the East becoming a core imperial centre, if that will ever happen – consider that for Britain, it took two centuries, and for the US, one and a half). The issue, as you point out, is not merely wealth. Saudi Arabia is very wealthy. The issue is whether China is able to engage in politically, militarily, and culturally robust super-exploitation (I used the example of tuition fees charged in the US to illustrate this, but I could have chosen to contrast the number of US military bases versus Chinese military bases abroad, or the number of globally known Chinese cartoon characters versus American ones etc etc). I claim that China cannot engage in Western kinds of global (as opposed to domestic) super-exploitation (except in limited areas, and even there, in a way that differs significantly from the core). Now to the issue of prison populations. I would be the last person to claim that US inmates are “pretty well off.” On the contrary: it is the prisoners of the global South, and to some extent, the global East, that are very much “not well off.” Obviously, slow death by malnutrition or simply lack of food is among the worst things that may happen to a human being. This does not mean that people who are actually fed (whilst they pay for their food, mostly!) are enjoying “benefits.” If they do (and strictly only by comparison!), that is a kind of benefit that nobody is ready to celebrate. The larger issue however, is this: in Western countries, crumbs still do fall off the table for the oppressed (to a lesser and lesser extent, obviously), and outside the global capitalist core, exploitation has reached such levels that people in those countries undertake perilous journeys to reach the shores of core countries just for those crumbs (such as the social benefits and other transfer payments that are still available in the West, and yes, the lack of food insecurity in the most immediate sense!). Within the late capitalist system, it is super-exploitation (globally and locally) that allows for the maintenance of some of those benefits, after all. However, consider the case of a person on death row, who receives a cup of tea, and has to pay for it, but the price is low due to the miserably inadequate pay of people who pick tea leaves. The question whether he “enjoys” “the benefit” of his cheap cup of tea, is quite separate from whether he is really “an exploiter.” US prison populations constitute a class that is super-exploited in an obvious way. Back to the issue of imperialism: I think that the burden of proof is on David Harvey, as he proposes a major re-calibration of the Marxist take on imperialism, with ramifications for any revolutionary strategy that is truly global. It is especially in that area where I see Harvey’s “error of chronology” and “idealism” potentially most dangerous.
While it’s true that many local companies, e.g. Foxconn, run the factories that produce goods for the West, in China and a few other locations, Smith shows in his book that a large majority of the profits accrue to the multinational they are contracting for, e.g. Apple. Smith also shows why this arrangement is more favorable for oligopsolistic corporations (Foster and McChesney 2012; Smith 2016) than FDI (foreign direct investment). Foxconn only achieves a very, very low rate of profit compared to Apple, despite the low wages and long hours that Foxconn employees infamously work. So I believe it is Harvey who is unwilling to expand his Marxist toolkit, rather than Smith.
Yes there is a global working class movement that has an alternative to capitalism and it’s been in existence since 1904 http://www.worldsocialism.org/spgb/our-object-and-declaration-principles , https://www.worldsocialism.org/spgb/pamphlets/capitalism-socialism-how-we-live-and-how-we-could-live Regards Ian.
I’m also unimpressed by Harvey’s argument. Harvey claims that Smith’s GPS is cockeyed, namely that is wrong for Smith to take Harvey’s claimed reversal of the East-to-West drain to refer to the South-to-North drain. Harvey says that his “East” means the block consisting of Japan, China, South Korea, Taiwan and Singapore. And he says that “wealth has moved from West to East.”
It is of course true that this East has grown wealthier and has gained relatively in comparison to the rest of the world. But that is not exactly what he said in his commentary that Smith quoted and in previous works – namely, that the “flow of value” had shifted and has largely been reversed, so that the East is now “draining” value from the West. There is a difference between the amount of wealth in a region and which way the wealth flows.
Moreover, as to East vs South, in a 2009 article on Socialist Project (and similarly the next year in The Enigma of Capital), Harvey wrote that this unprecedented shift “has reversed the long-standing drain of wealth from East, Southeast and South Asia to Europe and North America that had been occurring since the eighteenth century.” Here, with Southeast and South Asia included, is he really suggesting that the reverse drain now goes not just to China, Japan and the “tigers” but also to poorer countries like India, Bangladesh, Pakistan, Vietnam, Laos, Cambodia, the Philippines and Indonesia?
Harvey supplies no figures, but I think it hard to believe that the new wealth in the East is derived from draining value from the West. (All the harder to believe this of Cambodia and Bangladesh!) Where, for example, does China’s growth and wealth come from? Above all, from the super-exploitation of hundreds of millions of *Chinese* workers, many of them migrants driven economically from their rural homes to the cities where they live and labor under miserable conditions (remember the Foxconn suicides), with wages one-tenth or less of those in the West.
Yes, as Harvey says, China and Japan own lots of US debt. But the rate of return they get on it is close to zero, as Larry Summers has gloated. More generally, Thilo Hanemann and Daniel H. Rosen (rhg.com/notes/chinas-international-investment-position-an-update) have noted that despite a net surplus in its foreign assets, “China remains a net interest payer to the world due to lower rates of return on its overseas assets.”
It is an extremely dubious proposition that the flows of centuries have reversed direction and that the East in Harvey’s terms is draining value from the West – and even more dubious that the South is draining value from the North. I can believe that the East, like the West, is draining value from the South. But that is not what Harvey’s GPS tells us.
The US Dollar is by far the world’s leading reserve and trading currency for oil and almost every other commodity in the world (although Russia and China are challenging that now). It gives the US an enormous economic and political advantage over its rivals. Wars against Iraq, Libya, and Ukraine today are at least partially launched to protect this privileged position which enables it to rob every other nation. In the aftermath of the 2008 financial crisis, the dollar’s share in the world’s foreign-exchange trades rose slightly from 85% in 2010 to 87% in 2013. The dollar’s role as the undisputed reserve currency of the world allows the United States to impose unilateral sanctions against actions performed between other countries.
On 1 May 2015 U.S. District Judge Lorna Schofield in Manhattan formally ordered the French bank BNP Paribas to forfeit $8.83 billion and pay a $140 million fine as part of a sentence that also called for BNP Paribas to enhance its compliance procedures and policies over claims that it violated sanctions against Sudan, Cuba, and Iran. These violations of U.S. sanctions were not laws in France or the other countries involved in the transactions. In 2014 Beijing and Moscow signed a 150-billion-yuan central bank liquidity swap line agreement to get around American sanctions, which may well now operate over charges that they have violated UN sanctions on North Korea.
[…] When David Harvey says “the historical draining of wealth from East to West for more than two centuries has largely been reversed over the last thirty years,” his readers will reasonably assume that he refers to a defining feature of imperialism, namely the plunder of living labour and natural wealth in colonies and semi-colonies by rising capitalist powers in Europe and North America. Indeed, he leaves no doubt about this, since he prefaced these words with reference to “the old categories of imperialism.” But here we encounter the first of his many obfuscations. For more than two centuries, imperialist Europe and North America have also been draining wealth from Latin America and Africa, as well as from all parts of Asia… except from Japan, which itself emerged as an imperial power during the 19th century. ‘East-West’ is therefore an imperfect substitute for ‘North-South’, and this is why I dared to adjust the points of Harvey’s compass, drawing a petulant response. […]
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