Imperialism, China and Russia

An inter-imperialist clash is taking place in the Caucasus in which the Georgian dwarf is acting on behalf of the United States. The perfectly predictable and immediate Russian response - awarding Putin the first round - has only highlighted what an imbecile Georgia's president is. As a good nationalist, he (once again) made the choice in favour of an armed diversion, counting on US assistance which, though, was never going to be in the form of military intervention, when he should instead have been thinking about his country's disastrous state. By way of aside, it was another fine example of how dangerous it can be to be an ally of Washington. [Italiano]

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Imperialism, China and Russia

by Pier Francesco Zarcone


An inter-imperialist clash is taking place in the Caucasus in which the Georgian dwarf is acting on behalf of the United States. The perfectly predictable and immediate Russian response - awarding Putin the first round - has only highlighted what an imbecile Georgia's president is. As a good nationalist, he (once again) made the choice in favour of an armed diversion, counting on US assistance which, though, was never going to be in the form of military intervention, when he should instead have been thinking about his country's disastrous state. By way of aside, it was another fine example of how dangerous it can be to be an ally of Washington.

Having said that, let's have a look at the question of imperialism in the age of globalization. As we know well, imperialism first began to be talked around the end of the 19th century and early 20th, during a particular phase of development of the capitalist system. The best-known study at the time, published in 1902, was by John Hobson. But the first serious economic study of the question goes back to Charles A. Conant in 1898 and his "Economic Basis of Imperialism", published in the North American Review. "Classical" imperialism is seen as a sort of historical expansionism, driven both by an excess of capitalist accumulation and thus needing to be "exported" (and despite low consumption levels in the imperialist countries' internal markets) and by the need to acquire new sources of cheap raw materials and new markets. Imperialism has therefore generally been defined as the imposition by a single State of its economic and political dominance over foreign territories and/or States, to the benefit of the imperialist's national capital. This phenomenon may also make use of colonialism in the strict sense, that is to say the formal, direct appropriation of territories (and populations) in order to exploit them; nonetheless, it is not the same thing as colonialism as such.

Imperialism, then, is a form of monopolistic appropriation or control of raw materials, energy sources and the export of capital; on the ideological front it has to some extent become mixed up with the European nationalism that flowered in the 19th century with its sentiments (at times masked by humanitarianism) of racial superiority - something that was by no means introduced by German Nazism (how many recall, for example, Winston Churchill's revolting racism?).

The interpretation of the imperialist phenomenon provided by Lenin is now a classic one. It is an interpretation that has gone to the economic roots, establishing the high level of development in the concentration of production and capital which gives rise to monopolies; the formation (through the fusion of industrial capital and bank capital) of a strong financial capital and, therefore, a financial oligarchy; the growing importance (not just qualitative) of the export of capital in relationship with the export of goods; the division of world markets between the great powers. Looking at this analysis, and thus sharing the point of view of economic phenomenology, today's globalization may be considered to be a further derivation, in today's age of high information technology, of the situation as studied by Lenin.

It has been said in modern times that we have passed into a neo-imperialist phase characterized by a merely informal (moral and media) form of domination, though not totally without its military protection. Basically, globalization was felt to be an essential need. What strikes ones immediately about this phenomenon is the role (and the huge power) of the multinationals, the larges fluxes in the speculative movement of capital, the crushing quantitative predominance of the movement of capital with respect to the movement of goods, and the enormous circulation of data and information. Some people, however, have asked themselves if all this really does form the essential characteristic of the phenomenon. In other words, if we should not take into consideration aspects that are inherent to the productive dimension, in the sense that turning to the sphere of production relationships involves consideration of the role of capital in the current state of the levels of "valueization", in relationship with the spheres of production and circulation. Given that unequal exchange systems persist, the greater productive capacity of dominant countries results in the enjoyment of lower working hours - as far as production is concerned - and in the acquisition of monetary value that is much higher - as far as circulation is concerned. Basically, seen in this way, the real, basic (one could say structural) objective could be the maintenance of the unequal exchange system of value-labour, to which the need to appropriate this or that raw material would be instrumental (and no longer primary), as was the case in early 20th-century imperialism. The physiological persistence and increase in international tension would correspond to the need (of those involved) to defend and improve ones position in the planetary economic hierarchy, so as to make sure one's position in the unequal system of exchange prevails. This means that episodes of war are not merely an expression of a desire for domination (that is to say they are not only "subjective" phenomena).

Today, however, in an age characterized by the return of imperialism even in terms of apparently motiveless wars and brutal military occupations, and of course by the enormous importance of the capitalist powers' oil needs (and remembering that this raw material which provides well over 40% of the world's energy consumption [1] is not the unlimited resource it was once considered), it no longer seems possible to share the opinion that the essential objective is simply to maintain the unequal exchange system of value-labour. As far as I can see, our perspective must be overturned: it is energy resources that now have a vital, primary character. Indeed, we should be asking ourselves if the unequal exchange is nothing more than a means to enable domination, not the object of domination itself.

US imperialism outside the American continent has developed over various phases. After World War II it was associated with the intention of undermining the surviving European colonial system in order to create a series of client States for Washington, formally independent. This phase has generally been defined as a neo-colonialist phase, with local governments at the service of US multinationals and US political and military interests. An area of dominion was formed whose basis was provided thanks to military intervention, intelligence operations and above all the work of financial institutions, both international (e.g.. the IMF) and US - not to mention the armed forces of the client States. With the collapse of the USSR's satellite system followed by the USSR itself, the possibility was created for the United States to greatly extend its position of world dominion, thanks also to the spread of the neo-liberal ideology of globalization and the feeling of total impunity which took the place of fear of the enemy behind the Iron Curtain. Since the rise to power of George W. Bush, the oil lobby has becoming a determinant of imperialist policies (though still as part of a military-industrial complex), and Clinton's conservative line gave way to the ultra-right line of the current US presidency, which supports permanent war and military occupations, as well as theorizing the right of the United States not to feel bound by any international treaty if it is not in its national interests to do so.

The United States' enemies today - apart from Islamic fundamentalism, which the US itself fostered through its infancy - are China and Russia, irrespective of the formal nature of diplomatic relations, be they friendly or less so. China, still the world's most heavily-populated country, today seems to be the only State that is capable of rivalling the USA in about fifteen or twenty years' time. The enormous financial liquidity is enjoys allows China to act as an investor on a world-wide scale, and to support industrial projects from South Africa to Venezuela, Sudan to Indochina, creating agreements to manage corridors of raw materials from the Caspian to its industrial areas in the South-East, areas where it it one of the big competitors along with Russia, the USA and local powers such as Iran and India, acting as the Shanghai Pact's anti-Islamic gendarme. China's gigantic financial surplus is also the fruit of decades of accumulation resulting from the second path of "parallel development" (profits from agriculture invested in industrialization) that was followed by China from the late 1960s to the early '70s, which consisted in the exploitation of Chinese workers and the determination, appropriation and management of surpluses by the Chinese State, which did not (and still does not) disdain from using open repression.

In reality, there never was a transition to communism in China, no techno-bureaucracy ever took power; what we have seen over the past 60 years is State capitalist management by a rigid bureaucratic centralism that is today carrying out a transition to capitalism in its most savage form, but without troubling itself with going through the phase of Western-style political democracy. We should bear in mind that China's "economic miracle", apart from being based on the fierce exploitation of the working class and peasants, has made great use of a policy of exports directed at a world economy which is already greatly indebted, and it continues to aim well beyond its boundaries.

China's real rate of development is around 10% per annum (if not more): back in 1998 it already produced 11.5% of the world's GNP and it is calculated that by 2015, its internal market will have reached enormous levels. Nevertheless, China is largely dependant on oil supplies, due to its own low production. Tt is believed that by 2015 it will need to import at least 4 million barrels a day, half the current output of Saudi Arabia. The United States sees China's policies as a seriously disturbing factor on the strategic, economic and political scene in Africa, Asia and Latin America, beginning locally to take control of natural resources. China tends to treat far-Eastern seas as the Romans did their "Mare Nostrum", the Mediterranean, containing Japan and keeping an eye on the US military presence. Myanmar is in its orbit and it is seeking to extend its influence towards the Arabian Sea, the Persian Gulf and the Middle East. In Asia, China - together with Russia - has also recently extended its influence to the ex-Soviet republics where US influence has weakened, such as Uzbekistan. There are rumours of the Taleban being supplied by the Chinese as a sort of anti-US measure, but at the current state of affairs it is impossible to say more.

In southern China, 1,850 km of roads are being built and the natural defensive barriers of the Himalayan foothills are being strengthened. "Road No.3" which directly links the Chinese city of Kunming with Bangkok also crosses the scarcely-populated regions of northern Vietnam and Laos, giving the idea of a precise geo-strategic Chinese expansion. China provides technical and military aid to Pakistan, including nuclear technology. And there is no shortage of news agency sources claiming that the Chinese secret services are not unaware of the transfer of nuclear technology from Pakistan to Iran, North Korea and Libya. Moreover, the construction of a large port complex at the Gwadar naval base on the Arabian Sea gives China strategic access to the Persian Gulf and an outpost on the Indian Ocean. Finally, Tibet is being subjected to a policy of Chinese colonialization.

It is well known that there has been an increase in political and economic ties between Beijing and the Middle East, Africa and Latin America, as well as those countries who have been on the US blacklist for some time, like Iran, Sudan and Venezuela. Sudan and Iran are among China's top ten oil suppliers, but so too are Angola, Congo and Equatorial Guinea. China has also started to export capital, irking Washington into forming anti-China alliances. Above in Africa, at present, this is an important factor, given that trade between China and Africa had already reached something like $40 billion in 2005, an increase of 35% compared to the previous year. African oil reserves have turned out to be extremely interesting, so much so that during the '90s, China invested $8 billion in Sudan and $9 billion in Nigeria in 2005, and also provided Angola with a $2.5 billion loan (at very attractive rates) in 2004 with which to rebuild the country, shattered after 27 years of civil war. This was an initiative with serious political effects, as it allowed the Angolan government to reject an offer from the IMF, with its consequent, devastating, neo-liberal policies.

Neither should we ignore the fact that the US trade deficit with China - $202 billion in 2005 - has certainly not been getting smaller. China has become a sort of banker to the United States as it continues to buy up US Treasury Bonds and possesses huge currency reserves in dollars (these currency reserves and Treasury Bonds were calculated in 2004 as amounting to $600 billion). It is thus evident that, while on the one hand China is helping to support the dollar by affecting interest rates, on the other hand it is equally in a position to condition. And this is an extremely dangerous situation, because if one day the financial and economic difficulties of the United States worsen to the point that it can no longer face up to its various foreign debts, who will guarantee that US leaders do not resort to wiping their slate clean by means of a nice war? It would be a classic. At the moment, however, the United States is being forced to maintain an "elastic" attitude towards Beijing, as it needs China to go on financing its debt and buying its Treasury Bonds.

Some commentators are convinced that, if things continue along these lines, then China will be the world leader in trade by 2020. We shall see. The possibility of China becoming a reasonable autonomous economic giant can be seen in the non-correspondence between levels of foreign capital investment in China and the volume of Western sales on Chinese markets. The marked imbalance between Chinese exports and imports, which lies at the root of the economic boom in the old "Middle Empire", still results in the West still dreaming about making China a huge market for "first world" produce. As the Indian Nobel prize-winning economist Amartya Sen underlined, the Maoist age bequeathed China a reasonably efficient mass health service, but also and above all a state education system going from primary schools to university which has been free for all from the 1980s; thus, the country also enjoys the precious resource of a mass of good-quality university graduates, amongst whom numerous engineers with a variety of specializations, to the extant that for some time now, American industry has realized that China is able to produce excellent electrical components at much lower prices. The increase in Chinese consumption has undoubtedly contributed to the increase in oil prices, causing a crisis for US consumers, who are starting to realize how uneconomical their gas-guzzlers have become. But the best has yet to come, given that we are talking about a country of 1.3 billion inhabitants, compared with the measly 300 million in the United States.

On a military level, too, China is no joke. China's military spending is second only to the US and Pentagon experts - who are studying the possible scenarios of a future war with China - believe that this country has the best military potential in order to compete with the USA, and the destructive military technology that would enable it to counterbalance the United States' traditional advantage. It is no accident that (according to news published at the time of the recent Olympics) that most Chinese missiles are aimed at the United States.

Then there is post-Yeltsin Russia, which Putin has more or less put back on its feet and returned it to the level of a great power, if only to a more local level. For over five years now, the Russian economy has been growing rapidly (at least 7% a year), thanks in part to the quick-fire increases in energy prices. Two thirds of income, and about half of the Russian balance, derive from the sales of oil and gas, and the growth from this has allowed Russia to accumulate hundreds and hundreds of billions of dollars in gold and foreign currency, to pay off slices of its foreign debt to the International Monetary Fund, and to carry out an impressive programme of macroeconomic and financial stabilization. However, Russia cannot describe itself as a healthy country, economically speaking, given that its pro-capita income is still very low, around 35% of the EU and 25% of the USA. In wider terms, the Russian global economy is dangerously fragile due to its great dependency on trade in oil and gas, to which must be added its low level of economic diversification in recent years and the terrible state of its manufacturing industry, which is at best weak and in certain sectors actually declining further. It must be said, however, that any future fall in energy prices could in theory be compensated for by using the huge resources it has accumulated thus far and by means of public spending increases, in particular investments. There is of course also the unknown factor of inflation.

Of course, it is US obtuseness that has laid the premise for such an agreement, with Russia no longer the Cinderella it once was. In other words, it is well known that the war in Iraq caused an increase in the price of crude oil even excluding the increase in Chinese consumption; and its effects could not exclude the hydrocarbons sector, with the consequence that in the end the rise was so great that even the US economy could not handle it, all to the advantage of Russia and Gazprom. As we have said, this situation has allowed Russia to make huge cuts in its foreign debt, from 80% of GDP to around 25-20%; it is a situation that has permitted an upturn in the Russian economy to some extent.

Russia is not only carrying on a re-composition of its military strength, it is also, most importantly, seeking an economic reconstruction of what remains of the Commonwealth of Independent States. With Ukraine's Naftogaz now out of the running, wallowing in debt, Russia can get on with its plans to build (at a cost of €5 billion) a gas pipeline as far as the Baltic Sea to supply Germany and the UK, cutting out both Turkey and Poland and Ukraine, in such a way as to bring Central Asian gas reserves under its control. Because of the EU's energy dependency on Russia, we cannot exclude the possibility that the rouble will strengthen against the euro; in any event, Russia new currency reserves will allow Moscow to taken on a growing role and hegemony in the Euro-Asiatic states of the ex-USSR; they have also permitted Russia to improve its economic relations with India (to whom it has become the biggest arms supplier) and Japan.

Though China is currently ahead of Russia as far as exports are concerned - in particular in telecommunications, large infrastructure and public works - Russia is making huge progress in the IT sector, where it has seen a growth of at least 50%. It is calculated that by 2010 Russia will be in a position to earn around $15 billion in the export of information technology, thereby becoming the world leader in this sector; 10 years before that, it was earning no more than $200 million. Not many people know today about one third of all Microsoft software is produced by Russian workers (both at home and abroad) and that Russia is currently the third biggest exporter in this sector, after China and India.

Let us now examine the events in Georgia and Ossetia. I do not think there can be any doubt that they are part of an inter-imperialist clash between Russia and the United States, even though certain aspects appear to indicate the contrary. After the disastrous period that followed the implosion of the Soviet Union, Russia never really completed its internal restructuring, and it does not seem to be in a position to engage in an imperialist competition with the United States, particularly outside its own geographic area. Its new energy for international economic and political relations is part of a phase of expansion, that much is true; but as things stand at present, it is more defensive than offensive. It is defensive with regard to the perfectly obvious encirclement manoeuvre by the United States, which has already installed itself militarily in Kirghizstan and Uzbekistan: in other words in the same Central Asia where, up to 2002, Russia was in a position of check. The checkmate, however, never materialized. The Baltic states, Armenia, Azerbaijan, Georgia and Ukraine currently have pro-US governments; there is the question of US missile installations in Poland; there is also strong pressure for Ukraine and Georgia to join NATO. Indeed, there is no shortage of justifications for Russia's reaction to the Georgian attack on separatist Ossetia, a country which the West denies the right of political self-determination that it was so happy to impose on behalf of Kosovo against Serbia with massive bombardments (the first against a European State since World War II). It is of course true that Russia's stout defence of Ossetian self-determination is seasoned with a good dose of hypocrisy, since it denies Chechnya the same thing it demands for Ossetia. But that's the way it is. Realpolitik is one thing, consistency is quite another. If anything, it is sad to see the populations involved in these recurring nationalist disputes (and the underlying economic interests which are entirely unconnected) not developing any sort of movement in demand of their real social interests.

But for Russia there is one prime area of interest that is susceptible to imperialist development: the energy question. Apart from its connection with Russian defence needs, the Ossetia-Georgia problem is directly linked to the BTC oil pipeline that is being built (from Baku in Azerbaijan to Cehyan in Turkey, via Tbilisi in Georgia), which runs alongside the border of the Russian Federation. Azerbaijan and Georgia are effectively US protectorates, linked by military cooperation to Israel, which in turn has an interest in the Azeri oilfields that provide about 20% of its oil needs. Russia is therefore part of the world energy competition, independently of the fact that it does not need to import oil or natural gas. Nonetheless, it does need to control the transport of energy, particularly towards Europe. It is by no means absurd to think that a strengthening of this control can strengthen Russia position and allow Moscow to restructure itself as a great power, to the detriment of US influence in the region. We are in a phase when the world's reserves of oil, natural gas, uranium and (for industrial needs) copper and cobalt are diminishing, and control over them has become vital for the large economies.

There is no doubt that if the United States were able to get its hands on Iranian oil too (as well as Iraqi oil; let us not forget that Iraq has the second-largest proven oil reserves in the world) and reduce the Asiatic-Caucasian States, home to the new oil pipelines, to the rank of docile US vassals, then it everything would be in place for the Yankee establishment's dream come true of making the 21st century a more American century than previous one. As far as today's global situation is concerned, the name of the next inhabitant of the White House is not particularly important because, while it is true that this objective is a driving force behind the current administration, linked as it is to the Texan oil lobby, it is equally true that every President in the near future will have to deal with what is a specific economic and strategic need for the USA (a country, and an economy, which is today going through a serious crisis, with a frightening level of foreign debt, much of which owes to China). If the project were realized, the resulting choking of China and Russia would have obvious consequences. The great danger of such a situation does not only depend on US military strength but also on the fact that the absolute prevalence of specific US macroeconomic and military interests and its blindness towards any limitations are actually official doctrine in Washington. A sort of globalized Monroe Doctrine which could even lead to the local use of nuclear weapons.

Today, the United States not only has to deal with foreign affairs, it must also see to its own economic system, which makes one think (and hope) that the historical constant of decline following a phase of domination is true for the US, too. Things are going very badly for the US economy and people. The reign of easy living that followed World War II is seriously under threat. The US contribution to the world's production is at around 23%; the USA is the country with the biggest foreign debt and financial fluxes from Europe, Japan and China are vital in financing America's deficit. US economic growth is based on a behavioural pattern of American families which reminds one of the fable of "The Cricket and the Ant", that is to say, consumption way above production levels, resulting in an average indebtedness of US citizens of over 110% of their annual income, which entails increases in the percentage level for the interest on this debt as part of the average spending. The series of exploding financial speculation bubbles has certainly not eased matters and recession is at the door. The United States is an economic and financial power in serious crisis and its leaders know only too well that time is against them. This only increases the risk of adventurist policies that would have tragic consequences.

Pier Francesco Zarcone

22 August 2008


Note:
1. The United States supplies around one third of the world's oil production, but for some time now has been an importer - and thus dependent.