This is part one of a four-part article, first published in the March/April 2017 special “Costs of Empire” issue of Dollars & Sense magazine. Subsequent parts will appear on Triple Crisis over the next three weeks.
Economist and Triple Crisis contributor Jayati Ghosh argues that imperialism has not disappeared, but changed shape. The direct military conquest and control of economic territory by the great powers has given way (at least some of the time) to control through multilateral agreements and international institutions. Economic territory may still mean the seizure of land, mines, or oil fields—but it also may mean privatization of public assets and services, or the extension of intellectual property rights to new realms. Where the “labor aristocracy” of the imperialist countries once shared in the bounty of empire, the new incarnation of empire as “globalization” has helped grind away the incomes and status they once enjoyed.
Twenty-first century imperialism has changed its form. In the 19th century and the first half of the 20th century, it was explicitly related to colonial control; in the second half of the 20th century it relied on a combination of geopolitical and economic control deriving also from the clear dominance of the United States as the global hegemon and leader of the capitalist world dealing with the potential threat from the Communist world. It now relies more and more on an international legal and regulatory architecture—fortified by various multilateral and bilateral agreements—to establish the power of capital over labor. This has involved a “grand bargain,” no less potent for being implicit, between different segments of capital. Capitalist firms in the developing world gained some market access (typically intermediated by multinational capital) and, in return, large capital in highly developed countries got much greater protection and monopoly power, through tighter enforcement of intellectual property rights and greater investment protections.
These measures dramatically increased the bargaining power of capital relative to labor, globally and in every country. In the high-income countries, this eliminated the “labor aristocracy” first theorized by the German Marxist theorist Karl Kautsky in the early 20th century. The concept of the labor aristocracy derived from the idea that the developed capitalist countries, or the “core” of global capitalism, could extract superprofits from impoverished workers in the less developed “periphery.” These surpluses could be used to reward workers in the core, relative to those in the periphery, and thereby achieve greater social and political stability in the core countries. This enabled northern capitalism to look like a win-win economic system for capital and labor (in the United States, labor relations between the late 1940s and the 1970s, for example, were widely termed a “capital-labor accord”). Today, the increased bargaining power of capital and the elimination of the labor aristocracy has delegitimated the capitalist system in the rich countries of the global North.