Book Review: ‘A Theory of Imperialism’ shines light on the history of capitalism and way forward

Ajit Singh
May 25 · 7 min read

Utsa Patnaik and Prabhat Patnaik (with a commentary by David Harvey), A Theory of Imperialism. New Delhi: Tulika Books, 2016. xxiii + 212 pp.

For more than five centuries, capitalist development has been characterized by a great divergence. A tiny capitalist ‘metropolis’ of humanity, primarily concentrated in Western Europe and its offshoots of white settlement, have enjoyed tremendous prosperity while the overwhelming majority of the ‘periphery’ have lived in destitution. Across the political spectrum, countless explanations have been put forward to make sense of this phenomenon, from racialized notions of inferiority to blaming policy choices of rich countries. In A Theory of Imperialism, Utsa Patnaik and Prabhat Patnaik, provide a much needed, clarifying contribution to this conversation.

An outline of the argument

The central purpose of the authors is to argue that it is functionally necessary for metropolitan capitalism to create and continuously maintain a structural relationship of domination over the working peoples of the periphery. In contrast to many other theories of imperialism, the Patnaiks argue that this relationship is not merely the consequence of capitalist expansion or a strategic policy of wealthy nations, but a relationship that the advanced capitalist countries cannot do without. The authors’ theory of imperialism can be outlined as follows. First, metropolitan capitalism requires a significant number of primary commodities both for consumption and production inputs that it cannot produce on its own temperate landmass due to climatic and geographic reasons. As a result, these countries are dependent on the tropical and sub-tropical regions of the periphery, from which they must obtain these products.

Second, these tropical commodities are producible only at an increasing supply price. Since the tropical landmass is essentially entirely used up, a higher output of these commodities can only be produced with a rising supply price (i.e., due to the transition to lower quality land; difficulties posed by mining at greater depth). In the absence of land-augmenting measures, capital accumulation that enlarges demand for these commodities inevitably leads to a rise their prices.

Third, the phenomenon of increasing supply price of tropical products poses a serious threat to the advanced capitalist countries which require them. If increasing supply price manifests such that there is an expectation of persistent inflation, it poses a threat to the value of money under capitalism. This is because the role of money as a wealth-holding form will be undermined if its value is expected to continuously fall in relation to commodities. In such a case, wealth-holders would be induced to shift from money to commodities, particularly gold, to protect themselves against this trend. The destabilization of the value of money in the core would threaten the viability of the entire system. Controlling this increasing supply price-based inflation in the periphery is thus a paramount objective of metropolitan capitalism.

Fourth, while the threat of increasing supply price could be addressed through land-augmentation measures in the periphery, this is eschewed in favour of income deflation at the preference of metropolitan capitalism. The space for land-augmenting measures — such as public irrigation works, research and development, land reforms, the introduction of better farm practices, and the provision of subsidies and remunerative prices to peasants — which would allow for a higher output per unit of land and overcome the threat of increasing supply price, is restricted under capitalism. Such initiatives require state intervention and investment, which is ruled out by metropolitan capitalism in the name of ‘sound finance’ and ‘fiscal responsibility’.

Capitalism’s preferred and most common means of responding to the threat of increasing supply price has been by constricting the consumption of such peripheral products by the local population. The imposition of income deflation on working populations of the periphery has been the primary tool utilized by core capitalism to achieve this. In the colonial period, this was effected through direct control over the periphery by the metropolis: implementing systems of taxation against indigenous populations and keeping peripheral economies as ‘open’, captive markets for metropolitan goods, resulting in deindustrialization. In the contemporary, neoliberal period, similar processes compress the purchasing power of working people and curtail local absorption of peripheral products, including the slashing of public spending, implementation of austerity, and economic liberalization.

Examining historical data for several countries, primarily India, the Patnaiks marshal extensive evidence to demonstrate that increasing use of the tropical landmass to satisfy metropolitan demands, in terms of exports, results in declining in per capita foodgrain output and availability in the periphery. Decreasing foodgrain availability has the effect of increasing absolute poverty, in the form of declining per capita caloric and protein intake over time. The income deflation and immiseration imposed on working peoples of the periphery so that the metropolis can obtain increasing supplies of tropical commodities while warding off the threat of increasing supply prices and ensuring the stability of the value of money under capitalism, is an essential feature of imperialism — a feature that capitalism cannot do without. Imperialism has been necessary for capitalism throughout its history, “and is as central today as ever” (142).

The Patnaiks argue that the post-decolonization period of dirigisme that separates the colonial and neoliberal periods, represents an exceptional situation that was not brought about by the spontaneous operation of capitalism. Third World dirigisme — characterized by state intervention and investment, land-augmentation, and differing degrees of wealth redistribution — resulted in increases in foodgrain availability and caloric consumption. However, this was not the outcome of capitalism’s spontaneous operation, but a product of the weakening of imperialism by popular, anti-colonial, and socialist struggles around the world. With the rollback of such efforts, the neoliberal period has resumed capitalism’s ‘natural’ course. In the case of India, per capita foodgrain availability in the twenty-first century has fallen below levels prevailing during the colonial period prior to the Second World War.

Relevance of this work

A Theory of Imperialism not only provides a comprehensive, convincing argument that helps us better understand the historical operation of capitalism, the Patnaiks’ work has striking relevance to a number of pressing contemporary issues about which there is substantial disagreement and confusion.

First, the Patnaiks uncover the imperialist through line which has characterized capitalism in all of its historical phases, up to and including the present neoliberal period. Conventional understandings often shear the colonial period from its capitalist roots or sever its connection to the functioning of contemporary capitalism. Even among staunch opponents of capitalism, there has often been a confusion about whether imperialism is necessary to capitalism. In contrast, the Patnaiks clearly illustrate that the subjugation of the periphery is not merely an unfortunate consequence or odious policy choice of a bygone era but is functionally necessary to the advanced capitalist countries. The advances of the post-decolonization, dirigiste period were not a product of capitalism’s spontaneous operation, but rather the anti-colonial and socialist struggles against capitalism. As a result, their work demonstrates that it is necessary to transcend capitalism for working peoples of the periphery — the vast majority of humanity — to be liberated from their immiseration.

Second, the Patnaiks highlight the centrality of nation-states to peripheral development paths capable of avoiding the implementation of income deflation on working peoples. While it has not been without limitations and errors, state intervention and investment has been historically necessary to undertake the large-scale, coordinated measures that have allowed for the popular and independent advances in the global south. Indeed, this underlies metropolitan capitalism’s fixation on restricting and eliminating such state activism within the periphery in the name of ‘sound finance’, ‘free markets’, ‘globalization’ and ‘humanitarian intervention’. This view provides a much needed corrective to both liberal, cosmopolitan views, which erase the importance of states to the political economy of capitalism, along with left-wing, anti-statist views that are particularly popular in the West.

Third, the Patnaiks’ work sheds light on notions of ‘Chinese imperialism’ and the growing discourse of ‘debt-trap diplomacy’ surrounding Chinese finance — an issue of tremendous importance for developing countries engaging with China. In its spontaneous development, capitalism has ruled out state activism and expansionary fiscal policies in the periphery in name of ‘sound finance’ and ‘fiscal responsibility’, in favour of imposing income deflation to safeguard against the threat of increasing supply prices. Strict conditions imposed by Western financial institutions have curtailed the autonomy of peripheral countries to pursue popular, autocentric development. In stark contrast, China’s international finance and broader economic engagement is characterized non-intervention. The lack of conditionality of Chinese lending and its support for state activism and public spending has provided opportunities for other developing countries to resist austerity and income deflation — particularly the ‘Pink Tide’ anti-neoliberal governments of Latin America. The Patnaiks’ work highlights the distinction between capitalist imperialism and China’s international relations.

Fourth, A Theory of Imperialism is not only relevant to peoples of the periphery, but also those in the West, who are increasingly looking for alternatives to neoliberal development. The Patnaiks provide a compelling argument that the progressive features of capitalism’s “Golden Age” were not a product of the system’s natural development but rather due to a weakening of imperialism. During the 20th century the broad existence of concrete socialist alternatives to capitalism along with the wave of Third World anti-colonial struggles, compelled the advanced capitalist countries to become more responsive to popular demands. This pressure from the periphery and semi-periphery supported the enactment of progressive social and economic policies and anti-racist measures in the metropolis. This historical understanding is incredibly important in the contemporary period, where Western capitalist states, primarily the United States, express increasing hostility towards peripheral countries that pursue alternative, state-directed paths of development. Rather than buy into the fear-mongering and aggressive orientations of their ruling classes, working people in the advanced capitalist countries should recognize that their interests are aligned with international democratization and ending Western dominance.

A Theory of Imperialism is a seminal text that should be read by anyone concerned with global inequality, poverty and the liberation of the vast majority of humanity from these conditions. The authors clearly outline their theory and providing extensive historical and empirical evidence to support it. While every reader must decide for themselves whether they agree with the argument put forward, I, for one, found this to be a remarkable work that not only illuminates the historical operation of capitalism, but helps light the way forward during the profound period of crisis that we find ourselves in.