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Capital and Imperialism: Theory, History, and the Present
A comprehensive survey of capitalism's colonialist roots and uncertain future
Those who control the world’s commanding economic heights, buttressed by the theories of mainstream economists, presume that capitalism is a self-contained and self-generating system. Nothing could be further from the truth. In this pathbreaking book—winner of the Paul A. Baran-Paul M. Sweezy Memorial Award—radical political economists Utsa Patnaik and Prabhat Patnaik argue that the accumulation of capital has always required the taking of land, raw materials, and bodies from noncapitalist modes of production. They begin with a thorough debunking of mainstream economics. Then, looking at the history of capitalism, from the beginnings of colonialism half a millennium ago to today’s neoliberal regimes, they discover that, over the long haul, capitalism, in order to exist, must metastasize itself in the practice of imperialism and the immiseration of countless people.
A few hundred years ago, write the Patnaiks, colonialism began to ensure vast, virtually free, markets for new products in burgeoning cities in the West. But even after slavery was generally abolished, millions of people in the Global South still fell prey to the continuing lethal exigencies of the marketplace. Even after the Second World War, when decolonization led to the end of the so-called “Golden Age of Capitalism,” neoliberal economies stepped in to reclaim the Global South, imposing drastic “austerity” measures on working people. But, say the Patnaiks, this neoliberal economy, which lives from bubble to bubble, is doomed to a protracted crisis. In its demise, we are beginning to see—finally—the transcendence of the capitalist system.
Those who control the world’s commanding economic heights, buttressed by the theories of mainstream economists, presume that capitalism is a self-contained and self-generating system. Nothing could be further from the truth. In this pathbreaking book—winner of the Paul A. Baran-Paul M. Sweezy Memorial Award—radical political economists Utsa Patnaik and Prabhat Patnaik argue that the accumulation of capital has always required the taking of land, raw materials, and bodies from noncapitalist modes of production. They begin with a thorough debunking of mainstream economics. Then, looking at the history of capitalism, from the beginnings of colonialism half a millennium ago to today’s neoliberal regimes, they discover that, over the long haul, capitalism, in order to exist, must metastasize itself in the practice of imperialism and the immiseration of countless people.
A few hundred years ago, write the Patnaiks, colonialism began to ensure vast, virtually free, markets for new products in burgeoning cities in the West. But even after slavery was generally abolished, millions of people in the Global South still fell prey to the continuing lethal exigencies of the marketplace. Even after the Second World War, when decolonization led to the end of the so-called “Golden Age of Capitalism,” neoliberal economies stepped in to reclaim the Global South, imposing drastic “austerity” measures on working people. But, say the Patnaiks, this neoliberal economy, which lives from bubble to bubble, is doomed to a protracted crisis. In its demise, we are beginning to see—finally—the transcendence of the capitalist system.
424 pages, Paperback
Published March 2, 2021
46 people are currently reading
2176 people want to read
About the author
Utsa Patnaik
19 books65 followersUtsa Patnaik is an Indian Marxist economist. She taught at the Centre for Economic Studies and Planning in the School of Social Sciences at Jawaharlal Nehru University (JNU) in New Delhi, from 1973 until her retirement in 2010. Her husband is the Marxist economist Prabhat Patnaik.
Utsa Patnaik obtained her doctorate in economics from the Somerville College, Oxford, UK before returning to India to join JNU. Her main areas of research interest are the problems of transition from agriculture and peasant predominant societies to industrial society, both in a historical context and at present in relation to India; and questions relating to food security and poverty.
Utsa Patnaik obtained her doctorate in economics from the Somerville College, Oxford, UK before returning to India to join JNU. Her main areas of research interest are the problems of transition from agriculture and peasant predominant societies to industrial society, both in a historical context and at present in relation to India; and questions relating to food security and poverty.
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December 19, 2022
Magnum Opus on Imperialism’s central role in Capitalism.
Preamble:
--The last several years of reading were basically in preparation for this tome:
1) Marx’s Capital project: Capital: A Critique of Political Economy, Volume 1, Global South analysis of the Capital Project (Marx's Capital: An Introductory Reader), Harvey's A Companion to Marx's Capital Volume 1 + 2.
2) The Patnaiks’ other works: the very accessible The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry and the summary (The Veins of the South Are Still Open: Debates Around the Imperialism of Our Time) of their dense A Theory of Imperialism (which I finished after because the current book systematically applies theory to history… that’s the best way to learn dense social/economic theory!).
3) Michael Hudson on monetary imperialism (Super Imperialism: The Origin and Fundamentals of U.S. World Dominance) and Finance capitalism (The Bubble and Beyond).
4) Anwar Shaikh’s graduate class (online lectures: https://youtube.com/playlist?list=PLB... ) for his tome Capitalism: Competition, Conflict, Crises.
--Disclaimer: the first 3 chapters of this book are steeped in abstract economic theory/debates (like how Marx's Capital V1’s infamous first 3 chapters have become a right-of-passage of sorts).
--The foundations of a complex system are bound to be abstract, but the writing style added to the exhaustion. Some arguments are constantly repeated while others are only briefly referenced. To be fair, full elaboration would push this book well past 1,000 pages, although I was hoping for more clarification via historical applications later on. I blame Prabhat Patnaik (see: https://youtu.be/2I8FmEePoC8 ; Prabhat’s 3-part interview on this book: https://youtu.be/4TRZZvpxGQg ) who has a more abstract delivery than Utsa Patnaik (see: https://youtu.be/6RF5vx1W_kk).
Highlights:
1) Theory of Imperialism:
--Let's first establish the theory; later, we'll apply it to history.
--Real-world capitalism's 2 conditions of survival:
i) Growth: the whole point of capitalist investment is profit, thus M-C-M’ (Money invested into Commodity production to be sold for more Money).
ii) Value of Money: capitalism is a money-using system, where money needs to function sufficiently for both:
a) Means of market exchange (sell/buy)
b) Store of wealth
--Mainstream (Neoclassical) Economics’ utopic equilibrium framework includes Say’s Law where Supply creates its own Demand, thus no need for Demand management in a “free market” with “perfect competition”. Applied to the labour market, this assumes no involuntary unemployment (or unutilized capacity).
--However, real-world capitalism's Supply vs. Demand is turbulent (i.e. constant overshoot/undershoot) given the spontaneity of war-like competition (rather than a harmonious dance) between self-seeking capitalists (I’m referring to Shaikh’s “real competition” here for its clarity). This overshoot/undershoot behavior is indeed what we observe in the signature booms/busts over the entirety of real-world capitalism’s history, as capitalism manifests growth through violent lurches. Even pro-capitalists vaguely recognize this as “business cycles”.
--The Patnaiks focus on the sheer volatility of capitalist growth, i.e. how prone it is to crisis, thus 2 controls (to sustain capitalism's 2 conditions of survival): Demand management + Inflation control:
i) Demand management (for Growth): the Patnaiks review how prone a growth-boom is to falter and bust (“knife-edge”), and once bust, how difficult it is to revive growth. This starts with the unplanned (i.e. lack cooperation) nature of individual capitalist profit-seeking investments resulting in unutilized capacity, and how investments are only initiated if growth (profit) is anticipated (thus based on current growth/capacity utilization).
…If bust (no current growth), further capitalist investments thus require exogenous (outside capitalist system) stimulus. The mainstream believe this stimulus is “technological progress” (ex. “creative destruction”), but the Patnaiks review how the adoption of technology itself (an investment, after all) is often reliant on existing growth (see automobile example later), thus still endogenous to the capitalist system.
…The 2 exogenous stimuli identified are:
a) Colonialism/imperialism: the (neglected) extractive relations with pre-capitalist systems (focus on Global South). The key framework the Patnaiks start from is capitalism’s (continued) relations with its surroundings (thus, an open system), whereas the lineage of economic thought (including most of Marx's incomplete Capital project) focuses on capitalism as a closed system and can be co-opted by reductionist/ahistorical assumptions of how capitalism spreads.
b) State spending.
ii) Inflation control (for Value of Money):
--Given money is used for both (1) means of exchange and (2) store of wealth, storing wealth in money takes it out of exchange circulation. Furthermore, money as a store of wealth requires money to retain its value relative to commodities; if commodity prices inflate too much vs. value of money, then wealth-holders will switch from holding money to holding commodities, threatening the money-using system.
--Real-world capitalism flourished under colonialism’s supply of raw materials from limited tropical lands/fuel reserves, which have been brutally extracted (and priced cheaply if at all) to feed Global North capitalist industrialization/growth and establish the global division of labour. Thus, supply price inflation of these raw materials will derail the value of money and thus the money-using system.
--To protect the value of money, this threat of supply price inflation is controlled using income deflation of the Global South (i.e. imperialism) to create a “reserve army” of “price-takers”. This suppresses Global South incomes to free up their supply for Global North's growing demand. An alternative is to increase the supply, but this is limited given fixed tropical lands/finite fuel reserves and the need for Global South state investment (which risks building autonomous Global South states, threatening the freeing up of supply for Global North use). For more theory, see: The Veins of the South Are Still Open: Debates Around the Imperialism of Our Time
2) Theory applied to History:
--Now, let’s apply this theory of imperialism to history, categorized into 4 periods:
i) Colonialism before WWI: Edwardian/Victorian long boom:
a) Demand management? YES. Triangular “colonial arrangement” gold standard.
b) Inflation control? YES. Colonialism.
--Capitalism’s 2 requirements are fulfilled, making the colonial “long boom” the “ideal” period.
--First, some myth-busting. One common myth is a domestic “Agricultural Revolution” preceded and fueled the “Industrial Revolution”. But 18th century British agriculture was woefully insufficient since the key industrial input (raw cotton) was imported, while the period was plagued by infamous bread riots. See: The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry.
--Next, pre-colonial rulers of course extracted from the masses. But the Patnaiks are precise with their definitions (or else every asymmetrical relation becomes “imperialism” as it loses meaning). Pre-colonial rulers ruled locally, thus spent locally; there is large quantitative differences between this vs. the profit-maximizing long-distance extraction that established the “global divergence” (Global North vs. Global South; First World vs. Third World) and “labour segmentation” (temperate Europe/settler colonies vs. tropical/semi-tropical colonies) of the modern world.
--Tropical/semi-tropical (Global South) colonies suffered systemic deindustrialization where competitive leading industries were dismantled through force and states stripped of autonomy, creating “modern mass poverty” and the global reserve army of labour. This “coolie”/indentured labour was segmented in migration, mostly blocked from temperate Europe/settler colonies to keep down competition. Thus, the latter had tight labour markets where labour could organize to demand real wage increases (along with free settler land + colonial tropical drain). The other component of modern mass poverty is the colonial market encroachment of traditional social rights/responsibilities, thus more and more needs had to come from a volatile global market/debt traps/dispossession via capitalist property rights.
-intros: The Divide: A Brief Guide to Global Inequality and its Solutions and Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
-dive: Late Victorian Holocausts: El Niño Famines and the Making of the Third World
--The triangular colonial arrangement functioned as follows:
a) Britain: the leading capitalist nation had the responsibility of global demand management (via open trade of the gold standard) to prevent the downward spiral of protectionist retaliation (where nations turn inwards and global demand collapses). Thus, Britain opened its own market to capitalist goods from its rivals, newly-industrializing Europe (esp. Germany) and settler colonies (esp. US), as well as exported capital to them. Britain could only sustain this without balance-of-payments debt + domestic unemployment crises (from losing competitiveness) by balancing this with its colonial drain; do not be fooled with mainstream analysis that describe such arrangements as merely “benevolence”!
b) Newly-industrializing Europe/Settler colonies: capitalist growth from selling goods to Britain and receiving capital exports, mostly colonial tropical supply (thus, the reliance on colonies for capitalist growth without directly owning these colonies!). Migration to settler colonies stabilized Europe’s labour markets to dampen class struggle social crisis on both sides.
c) Colonies (the Patnaiks’ empirical research focuses on British India): colonial drain via colonial tax to sustain Britain’s global demand management gold standard. With Britain losing competitiveness to its rivals, colonial markets were also forced to sustain British manufacturing (“markets on tap”) so Britain can avoid protectionism. Supply price inflation control was simultaneously achieved by colonialism’s income deflation (tax drain/deindustrialization) forcing cheap supply extraction to both Britain and its rivals.
--In short, the colonies took all the beating of global capitalism’s contradictions. The East India Company greeted India with profit-maximizing taxation regardless of conditions, resulting in the 1770 Bengal Famine where 1/3 of the population died. As Michael Parenti says, the Global South is not poor. Colonialism does not go to poor places; it goes to rich places to loot. British India sustained massive export surpluses (exporting its riches) despite deindustrialization, which could have funded industrialization/re-industrialization sooner than Japan’s 1868 Meiji Revolution.
...However, Britain simply increased colonial taxation and intercepted gold/foreign exchange earnings to Indian exporters/state in return for British council bills (paid with by India's colonial taxes). The Patnaiks dissect the devil in the detail of colonial accounting (a reminder of the importance of real-world accounting skills, something Hudson also emphasizes!), which was “balanced” with hidden “home charges” that were tribute to fund British colonial wars (“administrative costs” were relatively minor). The glamorized British Indian railway was constructed on debt, prioritized guaranteed returns to foreign investors, and was used to further extraction.
...See comments below for rest of the review...
Preamble:
--The last several years of reading were basically in preparation for this tome:
1) Marx’s Capital project: Capital: A Critique of Political Economy, Volume 1, Global South analysis of the Capital Project (Marx's Capital: An Introductory Reader), Harvey's A Companion to Marx's Capital Volume 1 + 2.
2) The Patnaiks’ other works: the very accessible The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry and the summary (The Veins of the South Are Still Open: Debates Around the Imperialism of Our Time) of their dense A Theory of Imperialism (which I finished after because the current book systematically applies theory to history… that’s the best way to learn dense social/economic theory!).
3) Michael Hudson on monetary imperialism (Super Imperialism: The Origin and Fundamentals of U.S. World Dominance) and Finance capitalism (The Bubble and Beyond).
4) Anwar Shaikh’s graduate class (online lectures: https://youtube.com/playlist?list=PLB... ) for his tome Capitalism: Competition, Conflict, Crises.
--Disclaimer: the first 3 chapters of this book are steeped in abstract economic theory/debates (like how Marx's Capital V1’s infamous first 3 chapters have become a right-of-passage of sorts).
--The foundations of a complex system are bound to be abstract, but the writing style added to the exhaustion. Some arguments are constantly repeated while others are only briefly referenced. To be fair, full elaboration would push this book well past 1,000 pages, although I was hoping for more clarification via historical applications later on. I blame Prabhat Patnaik (see: https://youtu.be/2I8FmEePoC8 ; Prabhat’s 3-part interview on this book: https://youtu.be/4TRZZvpxGQg ) who has a more abstract delivery than Utsa Patnaik (see: https://youtu.be/6RF5vx1W_kk).
Highlights:
1) Theory of Imperialism:
--Let's first establish the theory; later, we'll apply it to history.
--Real-world capitalism's 2 conditions of survival:
i) Growth: the whole point of capitalist investment is profit, thus M-C-M’ (Money invested into Commodity production to be sold for more Money).
ii) Value of Money: capitalism is a money-using system, where money needs to function sufficiently for both:
a) Means of market exchange (sell/buy)
b) Store of wealth
--Mainstream (Neoclassical) Economics’ utopic equilibrium framework includes Say’s Law where Supply creates its own Demand, thus no need for Demand management in a “free market” with “perfect competition”. Applied to the labour market, this assumes no involuntary unemployment (or unutilized capacity).
--However, real-world capitalism's Supply vs. Demand is turbulent (i.e. constant overshoot/undershoot) given the spontaneity of war-like competition (rather than a harmonious dance) between self-seeking capitalists (I’m referring to Shaikh’s “real competition” here for its clarity). This overshoot/undershoot behavior is indeed what we observe in the signature booms/busts over the entirety of real-world capitalism’s history, as capitalism manifests growth through violent lurches. Even pro-capitalists vaguely recognize this as “business cycles”.
--The Patnaiks focus on the sheer volatility of capitalist growth, i.e. how prone it is to crisis, thus 2 controls (to sustain capitalism's 2 conditions of survival): Demand management + Inflation control:
i) Demand management (for Growth): the Patnaiks review how prone a growth-boom is to falter and bust (“knife-edge”), and once bust, how difficult it is to revive growth. This starts with the unplanned (i.e. lack cooperation) nature of individual capitalist profit-seeking investments resulting in unutilized capacity, and how investments are only initiated if growth (profit) is anticipated (thus based on current growth/capacity utilization).
…If bust (no current growth), further capitalist investments thus require exogenous (outside capitalist system) stimulus. The mainstream believe this stimulus is “technological progress” (ex. “creative destruction”), but the Patnaiks review how the adoption of technology itself (an investment, after all) is often reliant on existing growth (see automobile example later), thus still endogenous to the capitalist system.
…The 2 exogenous stimuli identified are:
a) Colonialism/imperialism: the (neglected) extractive relations with pre-capitalist systems (focus on Global South). The key framework the Patnaiks start from is capitalism’s (continued) relations with its surroundings (thus, an open system), whereas the lineage of economic thought (including most of Marx's incomplete Capital project) focuses on capitalism as a closed system and can be co-opted by reductionist/ahistorical assumptions of how capitalism spreads.
b) State spending.
ii) Inflation control (for Value of Money):
--Given money is used for both (1) means of exchange and (2) store of wealth, storing wealth in money takes it out of exchange circulation. Furthermore, money as a store of wealth requires money to retain its value relative to commodities; if commodity prices inflate too much vs. value of money, then wealth-holders will switch from holding money to holding commodities, threatening the money-using system.
--Real-world capitalism flourished under colonialism’s supply of raw materials from limited tropical lands/fuel reserves, which have been brutally extracted (and priced cheaply if at all) to feed Global North capitalist industrialization/growth and establish the global division of labour. Thus, supply price inflation of these raw materials will derail the value of money and thus the money-using system.
--To protect the value of money, this threat of supply price inflation is controlled using income deflation of the Global South (i.e. imperialism) to create a “reserve army” of “price-takers”. This suppresses Global South incomes to free up their supply for Global North's growing demand. An alternative is to increase the supply, but this is limited given fixed tropical lands/finite fuel reserves and the need for Global South state investment (which risks building autonomous Global South states, threatening the freeing up of supply for Global North use). For more theory, see: The Veins of the South Are Still Open: Debates Around the Imperialism of Our Time
2) Theory applied to History:
--Now, let’s apply this theory of imperialism to history, categorized into 4 periods:
i) Colonialism before WWI: Edwardian/Victorian long boom:
a) Demand management? YES. Triangular “colonial arrangement” gold standard.
b) Inflation control? YES. Colonialism.
--Capitalism’s 2 requirements are fulfilled, making the colonial “long boom” the “ideal” period.
--First, some myth-busting. One common myth is a domestic “Agricultural Revolution” preceded and fueled the “Industrial Revolution”. But 18th century British agriculture was woefully insufficient since the key industrial input (raw cotton) was imported, while the period was plagued by infamous bread riots. See: The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry.
--Next, pre-colonial rulers of course extracted from the masses. But the Patnaiks are precise with their definitions (or else every asymmetrical relation becomes “imperialism” as it loses meaning). Pre-colonial rulers ruled locally, thus spent locally; there is large quantitative differences between this vs. the profit-maximizing long-distance extraction that established the “global divergence” (Global North vs. Global South; First World vs. Third World) and “labour segmentation” (temperate Europe/settler colonies vs. tropical/semi-tropical colonies) of the modern world.
--Tropical/semi-tropical (Global South) colonies suffered systemic deindustrialization where competitive leading industries were dismantled through force and states stripped of autonomy, creating “modern mass poverty” and the global reserve army of labour. This “coolie”/indentured labour was segmented in migration, mostly blocked from temperate Europe/settler colonies to keep down competition. Thus, the latter had tight labour markets where labour could organize to demand real wage increases (along with free settler land + colonial tropical drain). The other component of modern mass poverty is the colonial market encroachment of traditional social rights/responsibilities, thus more and more needs had to come from a volatile global market/debt traps/dispossession via capitalist property rights.
-intros: The Divide: A Brief Guide to Global Inequality and its Solutions and Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
-dive: Late Victorian Holocausts: El Niño Famines and the Making of the Third World
--The triangular colonial arrangement functioned as follows:
a) Britain: the leading capitalist nation had the responsibility of global demand management (via open trade of the gold standard) to prevent the downward spiral of protectionist retaliation (where nations turn inwards and global demand collapses). Thus, Britain opened its own market to capitalist goods from its rivals, newly-industrializing Europe (esp. Germany) and settler colonies (esp. US), as well as exported capital to them. Britain could only sustain this without balance-of-payments debt + domestic unemployment crises (from losing competitiveness) by balancing this with its colonial drain; do not be fooled with mainstream analysis that describe such arrangements as merely “benevolence”!
b) Newly-industrializing Europe/Settler colonies: capitalist growth from selling goods to Britain and receiving capital exports, mostly colonial tropical supply (thus, the reliance on colonies for capitalist growth without directly owning these colonies!). Migration to settler colonies stabilized Europe’s labour markets to dampen class struggle social crisis on both sides.
c) Colonies (the Patnaiks’ empirical research focuses on British India): colonial drain via colonial tax to sustain Britain’s global demand management gold standard. With Britain losing competitiveness to its rivals, colonial markets were also forced to sustain British manufacturing (“markets on tap”) so Britain can avoid protectionism. Supply price inflation control was simultaneously achieved by colonialism’s income deflation (tax drain/deindustrialization) forcing cheap supply extraction to both Britain and its rivals.
--In short, the colonies took all the beating of global capitalism’s contradictions. The East India Company greeted India with profit-maximizing taxation regardless of conditions, resulting in the 1770 Bengal Famine where 1/3 of the population died. As Michael Parenti says, the Global South is not poor. Colonialism does not go to poor places; it goes to rich places to loot. British India sustained massive export surpluses (exporting its riches) despite deindustrialization, which could have funded industrialization/re-industrialization sooner than Japan’s 1868 Meiji Revolution.
...However, Britain simply increased colonial taxation and intercepted gold/foreign exchange earnings to Indian exporters/state in return for British council bills (paid with by India's colonial taxes). The Patnaiks dissect the devil in the detail of colonial accounting (a reminder of the importance of real-world accounting skills, something Hudson also emphasizes!), which was “balanced” with hidden “home charges” that were tribute to fund British colonial wars (“administrative costs” were relatively minor). The glamorized British Indian railway was constructed on debt, prioritized guaranteed returns to foreign investors, and was used to further extraction.
...See comments below for rest of the review...
July 24, 2022
An excellent, erudite, original attempt to construct a holistic framework through which to understand capitalist imperialism. In its implications broadly analogous to Radhika Desai, though theoretically its own animal. Patnaik follows in Monthly Review tradition, emphasizing the continuity between leninist, keynesian and Baran-Sweezy strains of imperialist theorizing. As opposed to that school, however, which privileges above all else the necessity to boost effective demand as the engine powering the spread of imperialism, Patnaik focuses on the necessity to have a 'market on tap' to balance imports and exports and hence safeguard the value of money against inflation.
This is a turn away from 'marxist economics', back to political economy: a state-to-state relationship coerced on a region within a specific historic context, not the universally applicable articulation of abstract economic forces. This attitude is reflected in Patnaik's attention to agricultural food commodities which (as opposed to most other commodities) can't simply be upscaled: investing in soil and bringing new soils into cultivation is a fundamentally different process from forming industrial capital. To bar consumer price inflation from upsetting the currency, a purchasing power deflation is forced on the third world working class, which is one of the reasons for its persistently high unemployment rates and economic stagnation.
On the flipside, Patnaik too easily asserts this; it all sounds very plausible, but it's not enough to demonstrate the validity of this theory in the British Empire and then extrapolate it to imperialism in general — you'll find British administrators writing this out in official proposals, but no way the IMF would do the same. Without a concrete agent organising this deflation, it wouldn't occur, and that agent would at least have to have a notion of why they're demanding what they're demanding.
This criticism isn't damning (still the most riveting work on the theory of imperialism I've read in a while) but it's a gap. Plausible yes, proven no.
This is a turn away from 'marxist economics', back to political economy: a state-to-state relationship coerced on a region within a specific historic context, not the universally applicable articulation of abstract economic forces. This attitude is reflected in Patnaik's attention to agricultural food commodities which (as opposed to most other commodities) can't simply be upscaled: investing in soil and bringing new soils into cultivation is a fundamentally different process from forming industrial capital. To bar consumer price inflation from upsetting the currency, a purchasing power deflation is forced on the third world working class, which is one of the reasons for its persistently high unemployment rates and economic stagnation.
On the flipside, Patnaik too easily asserts this; it all sounds very plausible, but it's not enough to demonstrate the validity of this theory in the British Empire and then extrapolate it to imperialism in general — you'll find British administrators writing this out in official proposals, but no way the IMF would do the same. Without a concrete agent organising this deflation, it wouldn't occur, and that agent would at least have to have a notion of why they're demanding what they're demanding.
This criticism isn't damning (still the most riveting work on the theory of imperialism I've read in a while) but it's a gap. Plausible yes, proven no.
October 12, 2023
So thorough and already helping me better understand some other readings I’d been struggling with! Makes me wonder how any economist — especially socialist/communist ones — manages to analyze the development of capitalism without placing colonialism front and center. Especially in regards to monetary systems — the stabilizing role played by colonies in regards to preventing inflation in the imperial core hasn’t come up in any other work I’ve read, but it perfectly explains the Great Depression and why capitalism’s subsequent attempted fixes (Keynianism and now neoliberalism) are so unstable and crisis-prone.
May 24, 2021
Building on their Theory of Imperialism, the Patnaiks describe the emergence of capitalism in each of its stages from a more global perspective - that is Capital embedded in Imperialism. It's a well-written and engrossing book.
February 23, 2024
This is a thought provoking continuation of the Patnaiks’ “A Theory of Imperialism” that fleshes out further and in a more accessible manner their understanding of the global development of capitalism through the colonial era to the present day. What’s most important about their works is the centrality they assign to the global south / former colonies around the world in their theories (as opposed to capitalism theorized as a closed system). The process of how our international economy has interlinked over the past few centuries is intimately tied to the colonial project and thus needs to be examined from this perspective. This can be a long and complex history on the micro level for each nation involved, but on a macro one, many structural similarities emerge. So much of the world’s production has “globalized” since the Industrial Revolution and yet the gains have remained primarily within a sliver of our stratified societies, whose wealth flows freely across the world without loyalties. These issues are what the book attempts to untangle and clarify.
This is a book to read if you’re interested in learning more about the economic problems of globalization and how they inherently lead to rising global poverty and inequality. Its analysis is overall anti-“internationalism” and towards a reclaiming of post-colonial countries’ sovereignty over their resources and production. It suggests supporting third world anti-imperial nationalism and a de-linking from globalization. I wasn’t fully convinced of the rhetoric on the backend of the book of their arguments’ relation to fascist movements around the world, but it may just be me own personal skepticism about fascism as a useful term. It’s also important to note that a lot of their analyses focuses on India, which may limit some of its generalizability. Nevertheless, this was a great book and definitely worth reading for anyone interested in the economics of globalization.
This is a book to read if you’re interested in learning more about the economic problems of globalization and how they inherently lead to rising global poverty and inequality. Its analysis is overall anti-“internationalism” and towards a reclaiming of post-colonial countries’ sovereignty over their resources and production. It suggests supporting third world anti-imperial nationalism and a de-linking from globalization. I wasn’t fully convinced of the rhetoric on the backend of the book of their arguments’ relation to fascist movements around the world, but it may just be me own personal skepticism about fascism as a useful term. It’s also important to note that a lot of their analyses focuses on India, which may limit some of its generalizability. Nevertheless, this was a great book and definitely worth reading for anyone interested in the economics of globalization.
November 9, 2023
This is a must read for anybody trying to understand capitalism and it’s need for colonialism/imperialism in order to function properly. Capitalism’s involvement of exogenous stimuli to alleviate balance of payments problems and create sufficient demand for the imperialist core commodities is described in extreme detail, focusing mainly on Britains colonial rule over India. They brilliantly explain the contradictions within each epoch of capitalism, what caused each one came to an end, why colonialism was the best case scenario for capitalism, and why decolonization brought about and continue to bring about destabilizations in the capitalist system. The first 60 pages or so are tough to get through but it’s an extremely rewarding read and you will finish this book with a much more thorough understanding of the workings of capitalism and it’s relationship with the global south, especially India.
P.S. You’ll never think of J. M. Keynes the same way again.
P.S. You’ll never think of J. M. Keynes the same way again.
February 7, 2021
An amusing case of "Thief calling thief". Patnaik is living off the taxes collected by the state from the poor and the downtrodden. And things don't stop here. Even when Patnaik won't be bothered to keep going to the office, the public will still be forced to pay a generous pension. But the thing doesn't stop here: the nice building, the office, all the nephews and nieces hired to serve Patnaik are also paid by the general public and not by the beneficiary.
So yes, let's talk how Capital generates Imperialism, and look away from Patnaik's sweet oppression scheme.
So yes, let's talk how Capital generates Imperialism, and look away from Patnaik's sweet oppression scheme.
April 17, 2024
The Patnaiks- Prabhat & Utsa Patnaik are the foremost political economists around bar none.
The clarity & conciseness of their thought shines through their books.
Infact I would even go on to say that my entire conception of economics prior to encountering their books seems like a complete waste of time in retrospect.
.....& yes economics is political..it always has been, is & always will be. A failure to grasp this as is the case with the Neo-classical, Austrian or even Keynesian schools of thought dooms them right from the get go.
The clarity & conciseness of their thought shines through their books.
Infact I would even go on to say that my entire conception of economics prior to encountering their books seems like a complete waste of time in retrospect.
.....& yes economics is political..it always has been, is & always will be. A failure to grasp this as is the case with the Neo-classical, Austrian or even Keynesian schools of thought dooms them right from the get go.
November 1, 2021
One of the single most important books to understand our current point in history and the historical dynamics that have produced it
September 8, 2022
This book lays out a complex and detailed history of capitalism in five stages. Their argument begins:
In other words, the Patnaiks argument outlines how capitalism would never have been successful without exogenous factors to keep growing, and after the age of slavery none have been more successful than colonial imperialism:
But that isn't the end of it. This stage of capitalism, according to the Patnaiks, faltered with WWI. The next stage was noted for its lack of any major exogenous factors, which promptly led to collapse in the Great Depression. It wasn't until WWII that a new exogenous factor was found—dirigisme, or massive state spending. These golden years lasted until the early seventies, crumbling under the pressures of inflation and the revolt of finance capital. The fourth stage was neoliberal globalization, which, while no longer dealing with pre-capitalist societies nor formally subsumed under metropolitan nation states, still resembled the colonial imperialism of a century before with its trade, capital flows, wage deflation and deindustrialization, and even justifying the arrangements with many of the same economic theories (such as Ricardo's theory of comparative advantage).
It was clear to the Patnaiks that the age of neo-colonialism had also faltered, and in their fifth stage the only exogenous factor which has kept the growth machine humming have been asset bubbles. They also acknowledge this stage too is coming to an impasse (and this work was published in early 2021, even before the onset of inflation). We seemed poised on the brink of a new stage, in other words, and the Patnaiks think the exogenous factors that have kept capitalism growing for so long are all but exhausted. But who knows? There can be no certainty when predicting what happens next. Perhaps Klaus Schwab, founder of the World Economic Forum, was right when in 2016 when he gave his vaguely Orwellian prediction, "by 2030 you will own nothing and be happy."
If anything, it's clear we aren't done with class war.
At any rate, I found this book very illuminating. Without a doubt it adds a great deal to the Marxist cannon on imperialism.
The pervasive tendency on the part of practitioners of theoretical economics has been to analyze capitalism as a closed self-contained system. This is logically untenable, and it also gives a misleading picture of its actual history. The purpose of this book is to counter this theoretical perspective. Here we put forward the proposition that not only has capitalism always been historically ensconced within a pre-capitalist setting from which it emerged, with which it interacted, and which it modified for its own purposes, but additionally that its very existence and expansion is conditional upon such interaction.
In other words, the Patnaiks argument outlines how capitalism would never have been successful without exogenous factors to keep growing, and after the age of slavery none have been more successful than colonial imperialism:
[T]his arrangement is an integral part of "imperialism," which entails the subjection of the periphery to a regime that keeps it open to trade and capital flows and allows metropolitan capital to dictate the production pattern on its landmass, while imposing income deflation on its working population.
But that isn't the end of it. This stage of capitalism, according to the Patnaiks, faltered with WWI. The next stage was noted for its lack of any major exogenous factors, which promptly led to collapse in the Great Depression. It wasn't until WWII that a new exogenous factor was found—dirigisme, or massive state spending. These golden years lasted until the early seventies, crumbling under the pressures of inflation and the revolt of finance capital. The fourth stage was neoliberal globalization, which, while no longer dealing with pre-capitalist societies nor formally subsumed under metropolitan nation states, still resembled the colonial imperialism of a century before with its trade, capital flows, wage deflation and deindustrialization, and even justifying the arrangements with many of the same economic theories (such as Ricardo's theory of comparative advantage).
It was clear to the Patnaiks that the age of neo-colonialism had also faltered, and in their fifth stage the only exogenous factor which has kept the growth machine humming have been asset bubbles. They also acknowledge this stage too is coming to an impasse (and this work was published in early 2021, even before the onset of inflation). We seemed poised on the brink of a new stage, in other words, and the Patnaiks think the exogenous factors that have kept capitalism growing for so long are all but exhausted. But who knows? There can be no certainty when predicting what happens next. Perhaps Klaus Schwab, founder of the World Economic Forum, was right when in 2016 when he gave his vaguely Orwellian prediction, "by 2030 you will own nothing and be happy."
If anything, it's clear we aren't done with class war.
At any rate, I found this book very illuminating. Without a doubt it adds a great deal to the Marxist cannon on imperialism.
January 10, 2023
Capitalism IS imperialism. Always has been. This book destroys various myths about capitalism held by those across the spectrum. From the shattering of the classical economists myth of a contained and isolated system, to the undoing of the classical Marxist stageism theory, this text places capitalism in its proper historical location—as parasitic system of the Europeans (and their settler colonial offspring) preying upon the tropics of the third world.
June 14, 2024
ex ante
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