Introduction
Since the end of World War Two (WW2), the world has attained high achievements in terms of economic, political, social, and cultural development. During the World War 1 and 2, many nations took part in the war and were unable to exploit their natural resources, generate adequate income through economic activities, and establish industries. The period was characterized with political unrest, military invasion, outbreak of contagious and non-communicable diseases, hunger and famine; aspects, which lowered productivity and economic development in the world. However, the end of WW2 marked a turning point in the world’s history as it provided a favorable platform for economic, social, political, and cultural development. This move enabled countries to exploit natural resources, embark on industrialization, expand their market niche through trade, promote regional integration, and improve the living standards of the people and their well-being. Based on this assertion, different nations started outdoing each other in terms of productivity, technology advancement, innovations, inventions, and trade. In order to maintain their reputation, superiority, and identity in the international trade affairs, nations adapted various economic systems including socialism and capitalism. However, capitalism remains one of the economic systems used by many nations and applicable in the international trade cycle.
Economics affirms that early history of capitalism remain traceable during the eighteenth and nineteenth centuries. This period was marked with slave trade and proliferation of colonialism. Many slaves from Africa were taken to Europe and other developed nations where they provide human labor. Colonial masters deprived Africans land and used it to generate raw materials for their industries. After processing the raw materials, European capitalists sold the finished products in Africa and other colonies, but at a higher price thus exploiting them. Through trade, European capitalists mined and exploited valuable mental and minerals ores thus fostering monetization in the region. The situation escalated further when European capitalists used forced subjugation to protect their industries and evict Africans from their lands. These aspects played a crucial role in the development of capitalism as they lead to accumulation of capital from other colonies.
The end of eighteenth century was dominated with industrial revolution as European capitalists charged their focus, money, and time and resources towards establishment of industries and empires in their respective colonies. European capitalists competed with other colonial masters in establishing, conquering, subjugating, and exploiting minerals from Africa and other colonies. Only power European capitalists and giant corporations were able to establish financial empires in their colonies thus influencing emergence of global orgy known as capitalism of imperialism. American imperialism dominated in this period as American continued exploiting resources from other colonies.
Economics articulate that capitalist regimes preferred using capitalism imperialism because of two reasons. Firstly, subjugated communities never used money for exchange as they depended on barter trade; a move that prevented European capitalists from exploiting minerals. Based on this fact, capitalist regimes employed Marxist concept of “Primitive accumulation” to change the situation. Secondly, capitalist regimes had to rule undeveloped nations so that they could have managed their industries effectively (Callinicos 56).
Although imperialism dominated in this period, no neoclassical theorist has focused on the concept of imperialism using economic theory. This is based on the assumptions that imperialism did not promote voluntary exchange constructs. Economic theories articulate that harmony should prevail when two parties engage in trade, but in this scenario, neoclassical theories ignored imperialism as force was applied. However, with the introduction of the discipline of “International Economics” economic theories have approached the concept of capitalist imperialism from a broader perspective. International economics discipline articulates that a nation can either impose trade restrictions or remove trade barriers in a free market without affecting exchange benefits (Lautzenheiser & Hurt 346). In other words, involved parties benefit equally and make profits. International economics approach also explains how deductive theories can be used to standardize monetization in a perfect and pure competitive market and promote international harmony.
Later, neoclassical theorists have had a deeper meaning of capitalist imperialism and have appreciated that it was inevitable, but profitable. They have understood that it was natural and viable as it entails aspects of rent, wages, exchange and utility, which define a society. Initially, colonized generations condemned capitalist imperialism, but they failed to understand the benefits associated with it and harmony that would have fuelled exploration of minerals and resources in the society. Neoclassical theorist argue that introduction of capitalism imperialism did not affect the exchange parity of the communities because they benefited from it in either ways. Normally, communities could have benefited by using their traditional exchange constructs, but lack other immerse merits accruing from embracing capitalist imperialism. In other words, irrespective of which means they use (either foreign or traditional) both parties benefit.
Previous studies and argument raised by economic theorists affirm that, no neoclassical theorists have explained concept of capitalist imperialism exhaustively. Although this assertion may hold true to most people, it is fair acknowledging the fact that there are a few and competent neoclassical theorists in the contemporary society who have addressed this concept professionally(Lautzenheiser & Hurt 347) Hobson, Luxemburg, and Lenin are a few neoclassical theorists who explain the concept of capitalist imperialism from a theoretical point of view.
In his analysis, Hobson articulate that imperialism is social constructed and influenced by religious deception. Based on this assertion, Hobson articulate that imperialism is curtailed by lofty motives, which are seen desirable in the eyes of politicians and businesspersons. In most cases, politicians and businesspersons believe that motives are directly proportional to achievements (Lautzenheiser & Hurt 351). In others words, politicians, and businesspersons assert that high motive qualifies for higher benefits. Politicians and businesspersons engage in exploitive activities, which amount to imperialism. They curtail and control means of production so that they can influence capitalist imperialism in the society.
Reacting to other theorist, Hobson argued that military and jingoism did contribute in imperialism, but refuted the fact that military and jingoism were inherent characteristics. In his analysis, he admits that all military officers have such characters, but this premise does not accord them the political influence. Professionally, military officers explicit conviction imperialism as they are influenced by their leaders and rulers.
Similarly, other theorists had attributed imperialism with blind and irrational dynamism of politics, an aspect that Hobson refuted. Hobson argue that the association between businesspersons and politicians regarding imperialism is not blind rational as people enunciates because it focus on certain classes of people. Based on this fact, his primary concern is that politicians and businessperson aim at increasing their profit and investments. By then, wealth and national heritage was concentrated in few hands especially among capitalist who controlled production. They had excess and colossal money that allowed them expands their business and invests more, while ordinary people struggled for basic needs. With time, investment and productivity exceeded demand and capitalists opted for foreign investments, but the same challenge faced other developed nations (Lautzenheiser & Hurt 351). Based on this shortfall, capitalists have to establish new colonies, which remain viable for exploration and trade. However, this was only possible by colonizing uncivilized states and affecting their market domain; a move that resulted in imperialism.
Hobson has been nicknamed as” naïve underconsumputionists” by other theorist as he did not obey say’s law. He stated products produced and available in the market could be consumed as long as their exchange, wage, and rent rates prevail. This provision is in line with Say’s law and disapproves critic leveled against him by other neoclassical theorists.
Luxemburg is another neoclassical theorist who made immerse contribution in the development of capitalist imperialism theories. In The Accumulation of capital, Luxemburg has articulated that a balanced economy cannot be realized when only capitalists and workers are involved in the production process. She asserts that capitalists cannot reap benefits from their business because production exceeds workers demand. In other words, demand is low while supply is higher for produced goods and services. In her analysis, Luxemburg argues that it will be difficult for capitalists to maintain adequate demand for the expanding capital market. Luxemburg argues that the cause of this imbalance emanates from capitalists wages and behavior. Normally, workers and capitalists belonged to two distinct classes. Capitalists controlled the factors of production and made abnormal profits from their investments. Consequently, workers earned their living by working for the capitalists and providing cheap labor.
Despite this variance, workers and capitalists had money, but they used in differently. Workers used all their money to purchase basic needs, while capitalists used their profits for consumption and investments. Luxemburg argues that capitalists had the drive and desire of increasing their profit margin through investment; an idea that contradicted workers intentions. The workers worked tirelessly so that to provide their families with basic needs. With time, production of consumer goods exceeded the purchasing power of working class against the capitalists. In other words, workers could not increase their consumption ratio because they did not have extra money. On the other hand, capitalists had the financial parity of using purchasing extra products, but they could not have done so. Several reasons influenced their decision. Firstly, there were laws and policies, which define the amount of products one purchased. Secondly, capitalists focused on investing; a trend fuelled by competition. Marx argued that accumulation of capital depended on competition level among capitalists. This applied that a capitalists enjoyed when his rivalries purchased more luxuries because it expands market niche. However, the capitalist refrained from the same trend so that to accumulate and preserve his/her capital.
Based on this fact, capitalists did not expand their consumption rate despite an increase in product capital because they had a senseless idea of accumulating capital. Using the Marx’s Two-sector Model, Luxemburg explains imbalance economy remains inevitable when two sectors namely 1 and 2 are involved in the production process. Sector 1 entails capitalists who control and produce means of production and sector 2 entails workers who are considered producer -consumer class. She explains that it is impossible for workers to consume excess products in sector 2 because both sectors expand differently (Lautzenheiser & Hurt 356). The imbalance between the productive sectors had severe impacts on capitalists as they recorded low profits; a move that compelled them to find other market and investment destinations. In order to save their industries, capitalists adapted and embraced imperialism because they saw it as an answer to their problem. Capitalists found markets for the products in other destination, but they believed that they had to rule and colonized underdeveloped states so that they can manage their investments thus fuelling imperialism.
In her analysis, Luxemburg explains that destruction and destabilization of traditional markets by capitalist ensured that their investment made profits. This aspect influence capital gut because it opened avenue for exploration of minerals, raw materials and availability of cheap labor. It also influenced imperialism because underdeveloped nations had to depend on developed countries for finished products. This implies that imperialist state controlled exports and imports from within and outside the country. In other words, imperialism was not defined through export and import ratios, but based on the territory a capitalist occupied. Borrowing the work of Marx, Luxemburg viewed “primitive accumulation” as innate and inherent trait in humans that foster for imperialism and capital accumulation (Lautzenheiser & Hurt 357). Based on this analysis, it is evident that Hobson and Luxemburg work are similar and complement each other.
Lenin’s contribution in the development of imperialism theories remains relevant in the economic discipline. In the analysis, Lenin share almost similar ideas and concepts from Hobson and Luxemburg, but she use a different approach. Lenin articulates that imperialism is the highest level of capitalism where capital reinter are separated from workers. In other words, institutional framework and network determine financial oligarchy in the market (Lautzenheiser & Hurt 363). Lenin articulates that financial institutions create financial oligarchy because they control operations of other corporations through board of directors, stock exchange rates, and shares. It is on this premises that Lenin argue that a few people in the society own financial capital and monopolize the market. They derive abnormal profits by selling other companies’ shares, bonds, and stock exchange thus generating surplus capital. Investments and exportation of surplus capital fuelled imperialism in the region. Capitalists were not concerned about export products, but export more capital in other destination thus leading to division of the word. Capitalist with higher financial capital separate from their arch rivalries and establish capitalist colonies in other parts of the world (Vladimir 1). It is also clear that financial capitalists and monopolies have close connection with political leaders and other prominent leaders in the government. This aspect enable them accumulate more capital because they have political influence on the market trends.
Lenin articulate the financial capitalists and businesspersons use their financial mighty to corrupt and bride politicians and labor union leaders; who revoke the workers strike. Based on this fact, it is evident that capitalist imperialism fuel workers exploitation and their rights at the workplace. Lenin pointed out that imperialism is characterized with division of world among monopolies and they experience low demands for produced products. In order to sustain their businesses, capitalists opted for imperialism, as they believed it offered an answer to their problems. In conclusion, Lenin affirms that imperialism is the highest state of capitalism where financial capitalists and monopolies use imperialism to colonize underdeveloped nations and maintain their businesses. Based on this analysis, it is clear that Lenin, Luxemburg, and Hobson are a few neoclassical theorists who have explained theories of capitalism and imperialism exhaustively.
Works cited
Lautzenheiser, Mark, and Emery Hurt. History of Economic Thought: A Critical Perspective. New York: M.E. Sharpe, 2011. Print.
Lenin, Vladimir. "Lenin: 1916/imp-hsc: VII. IMPERIALISM AS A SPECIAL STAGE OF CAPITALISM." Marxists Internet Archive. Version 1. Marxists Internet Archive, n.d. Web. 26 June 2013. http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch07.htm
Callinicos, Alex. Imperialism and Global Political Economy. New York: Polity, 2009. Print.
