The Nation-State, Core and Periphery: A Brief sketch of Imperialism in the 20th century.

At the dawn of the 20th century large colonial powers had carved up the world between themselves. ‘Core’ zones were marked by their level of economic development and the ‘peripheral’ zones their level of economic underdevelopment. The political organization of economic dependencies in the form of colonies and semi-colonies was established by a small number of nation-states. This domination of the periphery by the core nations is known as Imperialism. Imperialism in this overt political form, with directly administered peripheral zones is a salient feature of the first half of the 20th century. By the second half of the 20th century there began a process of decolonisation, whereby the direct political control of peripheral zones became problematic and untenable because of increasing political opposition in the form of national-liberation movements. Even though the formal political control of peripheral zones has been alleviated, many contend that the economic domination and relations of dependency persist. This represents one concern for evaluating the continuing relevance of imperialism in the mid to late 20th century. Another issue in evaluating the persistence of imperialism is the role of the nation state. Imperialism saw intra-imperialist conflict between different national-bourgeois over the division and re-division of the world. A leading organ of this conflict was the respective national-bourgeoisie’s nation-state. Some Neo-Marxists have argued that given the ostensive decline of the nation-state, imperial sovereignty is increasingly being replaced by a new form of sovereignty and economic organisation that transcends the nation as a unit of political and economic organization. These two issues: the persistence of unequal relations between the core and periphery and place of the nation-state within global capitalism are central to understanding the applicability of imperialism to the 20th century as a whole.

Joseph Schumpeter put forward a conceptualisation of Imperialism that dissociated it from Capitalism. Schumpeter (1951, p. 98, 128) believed that imperialism was a vestige of pre-capitalist expansionism and incompatible with the rationality of a capitalist free market economy. In this sense imperialism was seen as a social and political phenomenon contrary to the overall economic logic of the capitalist system. In contradistinction, numerous authors have attempted to elucidate the economic logic of imperialist policy. They orient their conception of imperialism firmly within the logic of capitalist economic systems. Marx (1986, p. 703) wrote that a key element in the development of capitalism, the primitive accumulation of capital, was accumulation by dispossession.

Later Marxist theorists tried to map the relationships between core and peripheral zones within more advanced capitalist formations. Theories to this effect were formulated by Rosa Luxemburg and Vladimir Lenin (Brookfield, 1975, p. 17). Each building on Marx, to the effect that capitalism was marred by structural contradictions which left it unstable, continually needing to re-constitute its arrangements on an ever larger basis. Lenin and Luxemburg disagreed on the exact dimension of this necessary expansion; the former emphasized capital exportation, while the latter the importance of foreign commodity markets (Brookfield, 1975, pp. 16-18). Both stressed the importance of economic relations in constituting imperialism: the dynamic of economic subordination of peripheral zones to the economic concerns of the capitalist core.

This economic understanding of imperialism, allows for a continuing understanding of the exploitive core/periphery relations that have persisted after the decline of official political subordination and dependency. World war two marked a crucial point in this transition from direct colonial rule to indirect forms of imperial domination. By 1980, 100 new nations had been inducted into the United Nations established in 1945 (Goff, Moss, Terry, Upshur, 2002, p.282). Representing a huge influx of newly formed nations who had either been given independence peacefully (India, Pakistan, etcetera) or achieved independence through violent conflict (Algeria, Angola, etcetera). This decline in the power of traditional European empires also heralded the ascension of the United States of America (U.S.A) to the position of world hegemony, contested only by the Soviet Union (U.S.S.R.).

A conflict over spheres of influence ensured between the U.S.S.R and U.S.A., the division and re-division of the world was at stake. The Marshall Plan of 1948, which committed $4 billion at first and $13 billion by 1951, can be seen as an attempt to limit the influence of the Soviet Union in Western Europe (Goff, Et el, 2002, p. 298). This policy quickly reinvigorated the economy of Western Europe, creating new Markets for U.S. exports, ensuring effective demand. This symbiotic relationship between the U.S.A and Western Europe was not replicated outside of the traditional core zones. The peripheral and semi-peripheral zones within the U.S.A.’s sphere of influence continued to be subordinated and exploited, with the “development of underdevelopment” (Frank, 1970a, p.5).

Frank (1970a, pp. 5-7) argued that the expansion of the capitalist system was predicated upon the development of ‘underdevelopment’, the creation of dependency or ‘satellites’ which are exploited by capitalist metropolitan centres. This “metropolis-satellite structure”, where economic surplus is expropriated from the satellite (periphery) to the metropolis (core), is a structure that has persisted throughout the development of capitalism (Frank, 1970a, p. 7). The case of Brazil during the period of 1947 to 1960 shows the dynamic of capital accumulation by dispossession that has characterized core/periphery relations throughout the history of capitalism.

It is generally argued that underdeveloped zones are so because of their pre-capitalist structure, or that they lack of integration into the world-system – the case of Brazil offers a rebuff to this hypothesis. Between 1947 and 1960, there was a heavy flow of capital between Brazil and the U.S.A. Private capital to Brazil from the United State’s amounted to $1,814 million, while capital flow from Brazil to the United States came to $3,481 million (Frank, 1970b, p. 90). This ratio of capital flow is in keeping with other nations of Latin America. The capital flow from Argentina, Brazil, Chile, Peru, Venezuela, Colombia and Mexico to the United States during the period of 1950 to 1961 totalled $6, 875 million, while flows to these counties from the United States amounted to $2, 962 million. Western Europe in 1960 saw the inflow of capital from the United States amount to $1,500 million, while outflow amounted to $1,000 million. During the same year capital inflow into the United States from underdeveloped countries amounted to $ 1,300 million and outflow to the same countries totalled $200 million (Frank, 1970b, p. 91). These trends exhibit and exemplify the overall tendency toward uneven exchanges between the capitalist core and underdeveloped periphery. The imperialist mechanisms employed in Brazil further underline the exploitive relationship between the capitalist core and the peripheral nations

In effect a key element in modern imperialism is accumulation by dispossession. In the case of Brazil, the profits were extracted out of the country by American bourgeoisie were based on their expropriation of Brazilian capital. Government supplied loans, concessions and foreign exchange privileges constituted a few of the mechanisms employed to dispossess Brazilians of their capital (Frank, 1970b, p. 91). In 1961 SANBRA and Anderson & Clayton, giant American cotton traders secured loans culminating to $54 billion cruzeiros from the bank of Brazil. They in turn used these loans to monopolize important stocks and crucial infrastructure of organization and distributions, in effect using Brazilian capital to control Brazilian cotton markets for U.S profits (Frank, 1970b, p. 92). These types of practices, the granting of special concessions for foreign capitalists, who in turn monopolize and control local industry and markets for their own profits have been a consistent feature of peripheral subordination to the imperialist core throughout the 20th century.

Imperialism, in terms of economic subordination of peripheral zones whose underdevelopment support the development of the imperial core, can be viewed as a consistent feature of the 20th century world-system. There is another contentious issue in assessing the continued relevance of traditional conceptualisations of imperialism throughout the 20th century. That is, the role of the nation-state. Lenin (1964, p. 266) argued that a fundamental feature of imperialism was the conflict between nationally based bourgeoisie over the division and re-division of the world. An organ of this conflict was the respective national-bourgeoisies’ nation-state. Robinson and Harris (2000, pp. 16-17, 22-23) have argued that the late 20th century has seen the development of a transnational capitalist class, which has instituted increased levels of integration within the production processes and developed an emerging transnational state apparatus. Arrighi (2002, pp. 472-3) has argued against this thesis claiming it to be an exaggeration of historical trends, which may or may not result a world-state superseding the nation-state phase of global capitalism.

Irrespective of the eventual outcome this tendency, global capitalism has undergone significant changes in the last quarter of the 20th century. 1967/1973 marked for Wallerstein (1996, p. 217) a key turning point in the decline of U.S world hegemony. The collapses of the Bretton-Woods system that had given the U.S.A control over the world financial regulation and the OPEC price hike represented key symptoms of this shift in the world-system. With the decline of the relative importance of the U.S. in the world-system, other nations and regions have increased in importance. North America, Europe and East Asia are seen to constitute a “tripolar regional structure” – accounting for 65% of world GDP in 1987 and almost 100% of world financial flows in 1992 (Ikeda, 1996, p. 47). This triad structure saw increased integration, as demonstrated by increasing foreign direct investment (FDI) between triad nations, which expanded from $142 billion to $410 billion between 1980 and 1988. Even within this period of increased “globalisation”, nation-states still intervened into the economy on behalf of their trans-national corporations and perceived economic interests (Ikeda, 1996, p. 66). This indicates that conflict between capitalists based within different nations, represented by different nation-states, still permeated the world-system towards the end of the 20th century. The development of supra-national institutions, such as the G7, far from representing the emergence of a transitional state apparatus reflected the shifting power-balance between the leading nation-states.

Supra-national institutions, which reflect the balance of power between different nation-states and modulate intra-state conflict, do not represent an invalidation of the concept of imperialism and its applicability to the 20th century world-system. In point of fact, Lenin (1964, p. 266) postulated that a key feature in the development of an imperial order was that of “international monopolist capitalist associations which share the world among themselves”.

At the close of the 20th century, formal empires with vast colonial dominions no longer persisted, but with the fall of formal political domination, economic domination of the periphery continued. Contrary to the views of Joseph Schumpeter, imperialism does not represent a mere pre-capitalist vestige. It has represented a continual feature in the development of capitalism in its earliest days until the current period. Decolonization did not end imperialism; it modified its methods of domination. Underdevelopment, developed by the imperial core in the periphery persisted. Accumulation by dispossession was unrelenting; the case of Brazil demonstrated the mechanisms utilized by imperialist powers during the 20th century in concrete terms. The statistics on capital flows between the United States, Europe and the six largest Latin American countries underscored the prevalence of imperialism and accumulation by dispossession. After the decline of U.S. hegemonic control over the world-system, signalled with the collapse of the Bretton-Woods system and their decreased relative economic importance, the nation-state did not become defunct. It still served as a crucial unit of political organization within the world-system, representing the interests of its capitalist class. Supra-national institutions at the close of the 20th century may represent the genesis of a new world-state. But during the time period in question they reflected the balance of power between the dominant nation-states of the North American, European and East Asian triad. Therefore, at the close of the 20th century the cores domination of the periphery persisted and global capitalism had not rendered the nation-state irrelevant. Imperialism as an analytical category remained pertinent.

Written by Mathew Toll.

Bibliography.

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(Written late 2007)