BY Prabhat Patnaik

"The inevitable effort of finance capital," Lenin wrote in Imperialism, "is to enlarge its spheres of influence and even its real territory." He was of course writing in a world marked by inter-imperialist rivalry, where this effort took the form of a competitive struggle between rival finance capitals that rapidly completed the division of the world, leaving no "empty space"; only a re-division of the world was now possible, through wars between rival financial oligarchies.

The wars that were unleashed, however, led to a weakening of imperialism and the separation of parts of the world from its hegemony, through the socialist revolutions and the process of decolonization that socialism helped to bring about.

The further centralization of capital, which led to its consolidation, has, on the one hand, attenuated inter-imperialist rivalry, since capital now wants the entire world, not divided into spheres of influence of rival powers, to be the domain of its free movement; on the other hand, it has also led to an attempt on the part of the now unified imperialism to reassert its hegemony over the territories that had previously broken away from it. The two weapons used by imperialism to achieve this latter goal are: the imposition of a neoliberal order in the world that essentially cancels out the effects of decolonization, and the outbreak of wars when the first weapon is not sufficient to achieve its goal.

The neoliberal regime has led to a weakening of the working class everywhere. In advanced countries, it has threatened workers with relocation to lower-wage Third World countries with large labor reserves, leading to stagnation in their wages. In Third World countries, these relocations have not reduced the relative size of labor reserves, so real wages have stagnated there as well. Thus, while the real wage vector has stagnated worldwide, labor productivity has risen everywhere (which, after all, is why the relative size of Third World labor reserves has not declined), leading to an increase in the share of economic surplus both for the world economy as a whole and in individual countries. This has led not only to a sharp increase in economic inequality (and even, in much of the Third World, to an increase in the proportion of the population suffering from absolute food deficiency), but also, precisely for this reason, to a tendency towards overproduction (since workers consume a larger share of their income than those living on surpluses).

The standard Keynesian remedy for overproduction, namely increased government spending, does not work under the neoliberal regime, since the two possible ways of financing this spending to stimulate aggregate demand, namely a larger fiscal deficit or higher taxation of the rich, are both ruled out under this regime. Both are anathema to finance capital, and the nation-state, faced with a globalised finance capital that can leave its shores in the blink of an eye, must bend to the whims of that finance capital.

With this tendency towards overproduction, inherent in neoliberal capitalism, pushing the global economy towards stagnation, there has been a resurgence of neo-fascism, with corporate capital tending to ally itself with neo-fascist elements who provide a diversionary discourse. This discourse is not concerned with material living conditions, but with stirring up hatred against an unfortunate religious or ethnic minority, presented as the “other”. Neo-fascist elements have taken power in some countries and are waiting in the wings in others, although the path between their takeover within a liberal democracy and the construction of a fascist state remains more or less long. But even the presence of neo-fascist elements in power in a country does not overcome this tendency towards overproduction: since the state remains a nation-state confronted with globally mobile finance, its inability, even under a neo-fascist government, to increase aggregate demand through public spending financed either by a larger budget deficit or by taxes on the rich, remains unchanged.

One may wonder why the responsibility for this inability of the nation-state to counter the tendency towards stagnation, and thus the rise of neo-fascism, must be attributed to imperialism. The answer is simple: any attempt by a nation to detach itself from the whirlwind of global finance and use the state to stimulate demand would be met with the imposition of economic sanctions by the phalanx of imperial states, led by the United States. The first weapon used by imperialism to reassert its hegemony, in short, leads to acute misery for peoples everywhere and a neo-fascist denouement.

The second way of reasserting its hegemony over parts of the world that had separated, that is, through wars, is now pushing the world towards catastrophe. The two wars that are currently taking place are encouraged and supported by imperialism and have the potential to escalate into nuclear confrontations. Let us take the war in Ukraine first. When the Soviet Union collapsed, Mikhail Gorbachev was assured that there would be no expansion of NATO eastward. But NATO did expand eastward, all the way to Ukraine. Ukraine itself did not want to join NATO; its duly elected president Viktor Yanukovych, opposed to any such idea, was overthrown by a coup d’état, organized under the supervision of US representative Victoria Nuland, who brought into the government supporters of Stepan Bandera, who had collaborated with Hitler’s troops during World War II. The new government not only expressed a desire to join NATO, but also triggered a conflict with the Russian-speaking region of Donbas that left thousands dead before Russia intervened.

Let us ask the question that is a litmus test in this matter: who is in favor of a peace agreement in the Ukrainian conflict and who is against it? The Minsk agreement, concluded between Russia and Ukraine with the help of France and Germany, was torpedoed by the United States and Great Britain, with Boris Johnson, the British Prime Minister, even traveling to kyiv to dissuade Ukraine from accepting it. And lest it seem that the various imperialist powers were speaking with different voices, Angela Merkel, the German Chancellor at the time, has now admitted that the Minsk agreement was a ruse to buy Ukraine time until it was ready for war. What is unmistakably clear is that the war in Ukraine is essentially a means of placing Russia under the hegemony of imperialism, which was the imperialist project after the collapse of the Soviet Union, and which was almost achieved under Boris Yeltsin.

Now let us take the other war, launched with astonishing brutality and ruthlessness by Israel against the Palestinian people and now against Lebanon. The full support of US imperialism for Israel seems at first glance to be a reflection of the strength of the lobby in US politics, rather than any imperialist project per se. This impression, however, is mistaken. Imperialism is not only complicit in Israeli “settler colonialism,” in the promotion of which Israel is carrying out genocide today and preparing mass ethnic cleansing tomorrow; its plan is to control the entire region through Israel.

Here again, the litmus test is this: Who is standing in the way of peace today? The United States officially accepts the “two-state” solution, but every time the proposal to accept Palestine as the 194th member state of the United Nations has been presented to the General Assembly, which would be the first step in implementing the “two-state” solution, the United States has voted against it; it is clear that it would veto such a measure in the Security Council. Its support for a genuine “two-state” solution is therefore a sham. Moreover, every time a critical point is reached in the truce negotiations between Israel and its opponents, whether it is Ismail Hanieh or Hassan Nasrallah, these leaders are assassinated by Israel. In short, the truce negotiations are yet another sham as far as Israel is concerned, and US imperialism is clearly complicit in this charade. Israel’s settler colonialism fits the role assigned to it by US imperialism as the local policeman of imperialism. And with the escalation of the war, the danger of a nuclear confrontation looms ever larger.

I have mentioned that the imposition of a neoliberal economic order and the engagement in wars are the two weapons used by the now unified imperialism to reassert its hegemony. But while one leads to neo-fascism, the other pushes humanity towards catastrophe.

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Prabhat Patnaik is an Indian Marxist economist. He taught at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, from 1974 until his retirement in 2010. He was Vice Chairman of the Kerala State Planning Board from June 2006 to May 2011. Prabhat Patnaik is a staunch critic of neoliberal economic policies and Hindutva, and is known as a Marxist-Leninist social scientist. According to him, in India, increasing economic growth has been accompanied by an increase in the extent of absolute poverty. The only solution is to change the class orientation of the Indian state.

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