A critique of David Harvey’s analysis of imperialism

In an interview with Richard Seymour in the March 2017 issue of Monthly Review, interviewer Michael Yates, in a question about imperialism, pointed out that noted Marxist scholar David Harvey “claims that wealth in the rich nations is being drained by the countries of the Global South.”¹ Specifically, Yates quoted Harvey:

Those of us who think the old categories of imperialism do not work too well in these times do not deny at all the complex flows of value that expand the accumulation of wealth and power in one part of the world at the expense of another. We simply think the flows are more complicated and constantly changing direction. The historical draining of wealth from East to West for more than two centuries, for example, has largely been reversed over the last thirty years.

Seymour suggested that what Yates said was too strong an indictment of Harvey. That is, the above quote by Harvey, taken from Prabhat and Utsa Patnaik’s book, A Theory of Imperialism,² should be taken to mean that certain reasonably wealthy countries in the Global South, such as Taiwan and South Korea, “might now be ‘sub-imperialisms.’” John Smith, author of the Monthly Review Press book, Imperialism in the Twenty-First Century,³ takes issue with Seymour’s interpretation of Harvey’s words. In what follows, Smith lays out his argument. Smith’s comments have been edited from several emails and files sent by Smith to Michael Yates. Smith has gone over these to make sure they accurately reflect his view. —Eds.

I. An Imperialism Denier

David Harvey, author of The New Imperialism and other acclaimed books on the history of capitalism and Marxist political economy, is an imperialism-denier who uses his considerable prestige as a prominent Marxist theoretician to miseducate his readers on the single-most important issue confronting Marxist political economy: the huge drain of value and surplus-value from the global South (in which I include low-wage countries in East Asia) to the imperialist centers, a flow which has greatly increased in scale and importance during the neoliberal era.

According to Richard Seymour, Harvey’s contrary claim, that the “historical draining of wealth from East to West for more than two centuries… has largely been reversed over the last thirty years,” might be due to Taiwan and South Korea becoming “sub-imperialisms.” I see no basis for this in the work from which this quote is taken. Moreover, Harvey’s suggestion that the “East” now exploits the “West” repeats almost word for word what he said in his 2014 work, 17 Contradictions and the End of Capitalism:

Disparities in the global distribution of wealth and income between countries have been much reduced with rising per capita incomes in many developing parts of the world. The net drain of wealth from East to West that had prevailed for over two centuries has been reversed as East Asia in particular has risen to prominence as a powerhouse in the global economy. The recovery of the global economy (anaemic though it was) from the traumas of 2007–9 had largely been based by 2013 on the rapid expansions in so-called “emerging” markets (mainly the BRIC countries). This shift had even extended to Africa, which was the one part of the world that seemed to have escaped almost entirely from any effects of the crisis.⁴

All of this makes it clear beyond doubt that Harvey was making a general point about the supposed reversal in the flow of value between North and South, not one restricted to the exceptional cases of Taiwan and South Korea.

Harvey’s refusal to acknowledge that production outsourcing to low-wage countries signifies a major expansion of direct and indirect super-exploitation of Southern labor by U.S., European, and Japanese multinationals, and his notion that this transformation marks the passing of imperialism not its apogee, has been and remains perhaps the dominant view among those in the imperialist countries who call themselves Marxists—although this denial of the actuality of imperialism has met with important resistance, notably from scholars and activists connected to Monthly Review and the Union for Radical Political Economics (URPE). I’ve included below an excerpt from my book, Imperialism in the Twenty-First Century, that traces Harvey’s denial of super-exploitation and the resulting South-North flows of surplus value through several of his works, as far back as his celebrated Limits to Capital. It provides plentiful additional evidence that Michael Yates’ characterization of David Harvey’s argument is entirely justified.

For example, in Harvey’s The Enigma of Capital, we find not only an earlier iteration of the idea that the “East” is now draining the “West” of wealth, but also his source for this idea. Harvey quotes approvingly the “delphic estimates of the U.S. National Intelligence Council, published shortly after Obama’s election, on what the world will be like in 2025. Perhaps for the first time, an official U.S. body has predicted that by then the United States… will no longer be the dominant player…. Above all, ‘the unprecedented shift in relative wealth and economic power roughly from West to East now underway will continue’.” And, he continues, “This ‘unprecedented shift’ has reversed the long-standing drain of wealth from East, South-East and South Asia to Europe and North America that has been occurring since the 18th century.”⁵

Elsewhere Harvey acknowledges that “awash with surplus capital, U.S.-based corporations actually began to offshore production in the mid-1960s, but this movement only gathered steam a decade later,”⁶ and that the shift of production to “anywhere in the world, preferably where labour and raw materials were cheaper,” was driven by the decision of U.S. capitalists to export their capital (directly, via FDI, or indirectly, via capital markets) rather than invest it at home—yet all this implies increasing metropolitan power over the recipient economies and increased exploitation of their living labor, meriting (indeed, necessitating) the term “imperialism.” A clue that helps explain how Harvey rationalizes this can be found in The New Imperialism, where he says:

transnational capitalist corporations…may have had a basis in one or other nation-state, spread themselves across the map of the world in ways that were unthinkable in earlier phases of imperialism (the trusts and cartels that Lenin and Hilferding described were all tied very closely to particular nation-states).⁷

In other words, it is a deracinated, deterritorialized, depersonalised “global capital” that profits from the shift of production to low-wage countries, not U.S. and European multinationals and their capitalist owners.

David Harvey’s commentary in the Patnaik’s new book is also remarkable in that, to the best of my knowledge, for the first time anywhere in his works he invokes the concept of super-exploitation:

The tropical and subtropical landmass has a huge labour reserve living under conditions conducive to super-exploitation. Over the last 40 years (and this is new), capital has increasingly sought to mobilise this labour reserve in search of higher profits through industrial development. If there is any one map that confirms the distinctiveness of the tropical landmass, it is one that shows the location of export processing zones, 90% of which are on the tropical landmass. And it is the labour reserve that is the lure not the agrarian base (though the partial proletarianisation that occurs as social reproduction is taken care of on the land while capital just exploits the labour at a less than living wage is undoubtedly important).⁸

He does not define super-exploitation, but even its invocation is an important departure. However, he departs but does not arrive: “capital” appears here as a disembodied, deterritorialized abstraction, not as multinational corporations headquartered in the imperialist countries, allowing him to avoid the obvious conclusion: that this new and hugely important development implies a major boost to flows of value from low-wage countries to the imperialist centers.

There is much else in this most recent of Harvey’s writings that seems designed to draw a veil around modern imperialist exploitation rather than shine a light on it—for instance, later on the same page as the above quote, he says:

The distinction between the reserve in the metropolitan centre and in the periphery has been much reduced by globalisation in recent times [as if immigration controls have been relaxed, rather than intensified!], such that we can reasonably think of the capital-labour confrontation as being more unified now across the spaces of the global economy [if only!!!].⁹

To conclude: Harvey’s claim that the “East” is now exploiting the “West” is consistent with his denial that the global shift of production to low-wage countries represents a major deepening of imperialist exploitation. His belated and confused recognition of super-exploitation in export processing zones and elsewhere on the “tropical landmass” indicates that far from a “tessellation” [a word used by Seymour in defense of Harvey in the above-referenced interview —Eds.], we have a crazy paving, designed to lead his readers down the garden path.

II. Excerpt on David Harvey from Imperialism in the Twenty-First Century, pages 199-202

Prominent among contemporary Marxist theorists, David Harvey has published a series of influential books on Marx’s theory of value, on neoliberalism, and on new imperialism. Because of the wide audience he has gained for his views, it is necessary to subject them to a severe evaluation, a task that can only be broached here.

The central argument in Harvey’s theory of new imperialism is that the overaccumulation of capital pushes capitalists and capitalism into an ever-greater recourse to non-capitalist forms of plunder, that is, forms other than the extraction of surplus-value from wage-labor, from confiscation of communal property to privatization of welfare, which arise from capital’s encroachment on the commons, whether this be public property or pristine nature. He argues that new imperialism is characterized by “a shift in emphasis from accumulation through expanded reproduction to accumulation through dispossession,” this now being “the primary contradiction to be confronted.”¹⁰ Harvey is right to draw attention to the continuing and even increasing importance of old and new forms of accumulation by dispossession, but he does not recognize that imperialism’s most significant shift in emphasis is in an entirely different direction—toward the transformation of its own core processes of surplus-value extraction through the global labor arbitrage-driven globalization of production, a phenomenon that is entirely internal to the labor-capital relation.¹¹

Harvey’s Limits to Capital has a deliberately ambiguous title. This book attempts to discover the limits to capital’s relentless advance, and also to identify the limitations of Capital, of Marx’s theory of capitalist development. Limits to Capital has far less to say about imperialism than Capital itself. In fact, imperialism receives just one brief, desultory mention: “Much of what passes for imperialism rests on the reality of exploitation of the peoples in one region by those in another…. The processes described allow the geographical production of surplus-value to diverge from its geographical distribution.”¹² Instead of expanding on this important insight, it receives no further attention. Harvey returns to the subject of the geographical shift of production to low-wage countries in The Condition of Postmodernity (1990), where this is seen not as a sign of deepening imperialist exploitation, as is implied by his passing comment in Limits to Capital, but of its accelerated decline:

From the mid-1970s onwards…newly industrialising countries…began to make serious inroads into the markets for certain products (textiles, electronics, etc) in the advanced capitalist countries, and w[ere] soon joined by a host of other NICs [Newly Industrialising Countries, such as] Hungary, India, Egypt and those countries that had earlier pursued import substitution strategies (Brazil, Mexico)…. Some of the power shifts since 1972 within the global political economy of advanced capitalism have been truly remarkable. United States dependence on foreign trade…doubled in the period 1973–80. Imports from developing countries increased almost tenfold.¹³

This stands reality on its head: far from signifying a power shift toward low-wage countries, the growth of foreign trade reflects an enormous expansion of the power of imperialist multinational corporations over these countries—and of the increased dependence of these corporations on surplus-value extracted from their workers. This conclusion is suggested by Harvey’s recognition, in the same work, of “the enhanced capacity of multinational capital to take Fordist mass production systems abroad, and there to exploit extremely vulnerable women’s labour power under conditions of extremely low pay and negligible job security.”¹⁴ Furthermore, the global shift of production processes to low-wage nations was driven by multinational corporations in order to buttress their competitiveness and profitability, and to great effect—yet Harvey presents this as evidence of declining imperialist competitiveness. According to Harvey, core capital attempts to resolve its overaccumulation crisis through a spatial fix, involving the production of “new spaces within which capitalist production can proceed (through infrastructural investments, for example), the growth of trade and direct investments, and the exploration of new possibilities for the exploitation of labor-power.”¹⁵ This is what Marx called a chaotic concept. Instead of the deliberate vagueness of exploration of new possibilities for the exploitation of labor-power, what about something much more straightforward like intensified exploitation of low-wage labor? In the end, Harvey’s attempts to add a spatial dimension to Marxist theory of capitalism falls flat because he neglects to discuss the spatial implications of immigration controls, of the deepening wage gradient between imperialist and semicolonial nations, of global wage arbitrage.

In The New Imperialism, published in 2003, Harvey devotes two pages to the globalization of production processes. He begins by inserting this development into his basic overaccumulation of capital thesis: “Easily exploited low-wage workforces coupled with increasing ease of geographical mobility of production opened up new opportunities for the profitable employment of surplus capital. But in short order this exacerbated the problem of surplus capital production world-wide.”¹⁶

Formally separating industrial capitalists and financial capitalists, he ascribes the driving source of the outsourcing wave to the unleashed power of finance capitalists asserting their domination over manufacturing capital, to the great detriment of U.S. national interests:

A battery of technological and organisational shifts…promoted the kind of geographical mobility of manufacturing capital that the increasingly hyper-mobile financial capital could feed upon. While the shift towards financial power brought great direct benefits to the United States, the effects upon its own industrial structure were nothing short of traumatic, if not catastrophic…. Wave after wave of deindustrialisation hit industry after industry and region after region…. The U.S. was complicit in undermining its dominance in manufacturing by unleashing the powers of finance throughout the globe. The benefit, however, was ever cheaper goods from elsewhere to fuel the endless consumerism to which the U.S. was committed.¹⁷

Leaving aside its nationalist and protectionist perspective, and its failure to notice that cheaper goods from elsewhere are made possible by cheaper labor elsewhere, that is, super-exploitation, Harvey’s argument contains a fatal flaw. Outsourcing was not so much driven by the awakening of finance but by stagnation and decline in the rate of manufacturing profit and the efforts of the captains of industry to counter this. Increased imports of cheap manufactured goods did much more than fuel consumerism, it also directly supported the profitability and competitive position of North America’s industrial behemoths, and was actively promoted by them. Far from ending U.S. dominance—in other words, the ability of its corporations to capture the lion’s share of surplus-value—outsourcing has opened up new ways for U.S., European, and Japanese capitalists to entrench their dominance over global manufacturing production.

Harvey’s fundamental error only goes so far in explaining the dreadful reformism of his conclusion to The New Imperialism, where he pined for “a return to a more benevolent New Deal imperialism, preferably arrived at through the sort of coalition of capitalist powers that Kautsky long ago envisaged…. [This] is surely enough to fight for in the present conjuncture,”¹⁸ forgetting what he wrote two decades earlier in his conclusion to Limits to Capital: “The world was saved from the terrors of the Great Depression not by some glorious new deal or the magic touch of Keynesian economics in the treasuries of the world, but by the destruction and death of global war.”¹⁹

Notes

1. ↪ Richard Seymour, “Mourning and Militancy,”interviewed by Michael D Yates, Monthly Review 68/10:17-24 (March 2017), 21.
2. ↪ Prabhat Patnaik and Utsa Patnaik, A Theory of Imperialism (New York: Columbia University Press, 2016), 169.
3. ↪ John Smith, Imperialism in the Twenty-First Century (New York: Monthly Review Press, 2015).
4. ↪ David Harvey,Seventeen Contradictions and The End of Capitalism (London: Profile Books, 2014),170.
5. ↪ David Harvey, The Enigma of Capital (Oxford: Oxford University Press, 2010), 34-35. Later, on p. 110, he again refers to the “historic reversal of 150 years or more of wealth transfer from east and south Asia to the United States and Europe,” adding that this signifies “a radical change in the capacity of the U.S. to dominate global capitalism as it has done since 1945.”
6. ↪ Ibid., p16.
7. ↪ David Harvey, The New Imperialism (Oxford, Oxford University Press, 2003), 176–77. [For an earlier critique of Harvey’s position in the latter book, see John Bellamy Foster, “The New Imperialism of Globalized Monopoly-Finance Capital: An Introduction,” Monthly Review 67, no. 3 (July-August, 2015): 10-11. —Eds.]
8. ↪ Patnaik, A Theory of Imperialism, 165. He makes a passing reference to super-exploitation in The New Imperialism (168-9): “Foxconn, which makes Apple computers under super-exploitative labour conditions from immigrant labour in Southern China, registers a 3% profit while Apple, which sells the computers in the metropolitan countries, makes 27%.”
9. ↪ Ibid.
10. ↪ David Harvey, 2003, The New Imperialism (Oxford, Oxford University Press), 176–77.
11. ↪ Shaikh and Tonak explain the crucial difference between surplus-value extracted in capitalist production process and capitalist profits deriving from interaction between capital and, for example, petty-commodity producers: “At the most abstract level of Marxist theory, aggregate profit is simply the monetary expression of aggregate surplus value. But it is often forgotten that profit can also arise from transfers between the circuit of capital and other spheres of social life. Marx calls this latter form of profit on alienation, which—unlike a profit on surplus value—is fundamentally dependent on some sort of unequal exchange. Its existence enables us to solve the famous puzzle of the difference between the sum of profits and sum of surplus values brought about by the transformation from values to prices of production.” Anwar M. Shaikh and E. Ahmet Tonak, 1994, Measuring the Wealth of Nations (Cambridge University Press), 35.
12. ↪ David Harvey, [1982] 2006, The Limits to Capital (London: Verso), 441-2.
13. ↪ David Harvey, 1990, The Condition of Postmodernity (Oxford, Blackwell Publishing), 165.
14. ↪ Ibid., 153.
15. ↪ Ibid., 183.
16. ↪ Harvey, The New Imperialism, 63–64.
17. ↪ Ibid., 64–65.
18. ↪ Ibid., 209–11.
19. ↪ Harvey, The Limits to Capital, 444.