In the matter of defining imperialism, however, we have to enter into controversy, primarily, with Karl Kautsky, the principal Marxist theoretician of the epoch of the so-called Second International—that is, of the twenty-five years between 1889 and 1914. The fundamental ideas expressed in our definition of imperialism were very resolutely attacked by Kautsky in 1915, and even in November 1914, when he said that imperialism must not be regarded as a “phase” or stage of economy, but as a policy, a definite policy “preferred” by finance capital; that imperialism must not be “identified” with “present-day capitalism”; that if imperialism is to be understood to mean “all the phenomena of present-day capitalism”—cartels, protection, the domination of the financiers, and colonial policy—then the question as to whether imperialism is necessary to capitalism becomes reduced to the “flattest tautology”, because, in that case, “imperialism is naturally a vital necessity for capitalism”, and so on. The best way to present Kautsky’s idea is to quote his own definition of imperialism, which is diametrically opposed to the substance of the ideas which I have set forth (for the objections coming from the camp of the German Marxists, who have been advocating similar ideas for many years already, have been long known to Kautsky as the objections of a definite trend in Marxism).
Kautsky’s definition is as follows:
“Imperialism is a product of highly developed industrial capitalism. It consists in the striving of every industrial capitalist nation to bring under its control or to annex all large areas of agrarian [Kautsky’s italics] territory, irrespective of what nations inhabit it.”
This definition is of no use at all because it one-sidedly, i.e., arbitrarily, singles out only the national question (although the latter is extremely important in itself as well as in its relation to imperialism), it arbitrarily and inaccurately connects this question only with industrial capital in the countries which annex other nations, and in an equally arbitrary and inaccurate manner pushes into the forefront the annexation of agrarian regions.
Imperialism is a striving for annexations—this is what the political part of Kautsky’s definition amounts to. It is correct, but very incomplete, for politically, imperialism is, in general, a striving towards violence and reaction. For the moment, however, we are interested in the economic aspect of the question, which Kautsky himself introduced into his definition. The inaccuracies in Kautsky’s definition are glaring. The characteristic feature of imperialism is not industrial but finance capital...The characteristic feature of imperialism is precisely that it strives to annex not only agrarian territories, but even most highly industrialised regions (German appetite for Belgium; French appetite for Lorraine), because (1) the fact that the world is already partitioned obliges those contemplating a redivision to reach out for every kind of territory, and (2) an essential feature of imperialism is the rivalry between several great powers in the striving for hegemony, i.e., for the conquest of territory, not so much directly for themselves as to weaken the adversary and undermine his hegemony....
Kautsky refers especially—and repeatedly—to English writers who, he alleges, have given a purely political meaning to the word “imperialism” in the sense that he, Kautsky, understands it. We take up the work by the English writer Hobson, Imperialism, which appeared in 1902, and there we read:
“The new imperialism differs from the older, first, in substituting for the ambition of a single growing empire the theory and the practice of competing empires, each motivated by similar lusts of political aggrandisement and commercial gain; secondly, in the dominance of financial or investing over mercantile interests.”
We see that Kautsky is absolutely wrong in referring to English writers generally...We see that Kautsky, while claiming that he continues to advocate Marxism, as a matter of fact takes a step backward compared with the social-liberal Hobson, who more correctly takes into account two “historically concrete” (Kautsky’s definition is a mockery of historical concreteness!) features of modern imperialism: (1) the competition between several imperialisms, and (2) the predominance of the financier over the merchant. If it is chiefly a question of the annexation of agrarian countries by industrial countries, then the role of the merchant is put in the forefront.
Kautsky’s definition is not only wrong and un-Marxist. It serves as a basis for a whole system of views which signify a rupture with Marxist theory and Marxist practice all along the line. I shall refer to this later. The argument about words which Kautsky raises as to whether the latest stage of capitalism should be called imperialism or the stage of finance capital is not worth serious attention. Call it what you will, it makes no difference. The essence of the matter is that Kautsky detaches the politics of imperialism from its economics, speaks of annexations as being a policy “preferred” by finance capital, and opposes to it another bourgeois policy which, he alleges, is possible on this very same basis of finance capital. It follows, then, that monopolies in the economy are compatible with non-monopolistic, non-violent, non-annexationist methods in politics. It follows, then, that the territorial division of the world, which was completed during this very epoch of finance capital, and which constitutes the basis of the present peculiar forms of rivalry between the biggest capitalist states, is compatible with a non-imperialist policy. The result is a slurring-over and a blunting of the most profound contradictions of the latest stage of capitalism, instead of an exposure of their depth; the result is bourgeois reformism instead of Marxism.
...
The reply seems quite plausible, but in effect it is a more subtle and more disguised (and therefore more dangerous) advocacy of conciliation with imperialism, because a “fight” against the policy of the trusts and banks that does not affect the economic basis of the trusts and banks is mere bourgeois reformism and pacifism, the benevolent and innocent expression of pious wishes. Evasion of existing contradictions, forgetting the most important of them, instead of revealing their full depth—such is Kautsky’s theory, which has nothing in common with Marxism....
“From the purely economic point of view,” writes Kautsky, “it is not impossible that capitalism will yet go through a new phase, that of the extension of the policy of the cartels to foreign policy, the phase of ultra-imperialism,” i.e., of a superimperialism, of a union of the imperialisms of the whole world and not struggles among them, a phase when wars shall cease under capitalism, a phase of “the joint exploitation of the world by internationally united finance capital.”
...
Kautsky’s utterly meaningless talk about ultra-imperialism encourages, among other things, that profoundly mistaken idea which only brings grist to the mill of the apologists of imperialism, i.e., that the rule of finance capital lessens the unevenness and contradictions inherent in the world economy, whereas in reality it increases them.--Lenin (1917) Imperialism, The Highest Stage of Capitalism, Chapter VII
Much of Lenin's argument in his Imperialism, The Highest State of Capitalism is directed against that 'renegade' Kautsky's position. But Kautsky's own stance has not generated much enthusiasm nor, it seems, interest from subsequent scholarship (which tends to read Kautsky (1854 – 1938), a major theorist of the second International, explicitly or implicitly, through Lenin's perspective). It is pretty clear why it was important to Lenin's leadership and strategic ambitions to disqualify Kautsky and why, perhaps, there is a sense in which Kautsky's stance on imperialism is not echt Marxist (I have no stake in that debate). But Kautsky's account treats uncorrupted liberalism as the pathway into modern (nineteenth century) imperialism. If Kautsky is right about this (to be explored below) this would be highly salient to the liberal tradition's self-understanding. For, by contrast, Lenin and Hobson put rent-seeking elites at the core of their explanations of such imperialism (even if they diverge on the details--with Lenin ((recall; and here) singling out monopoly capitalism as the late stage of capitalism, while Hobson (recall) points to a too limited franchise that facilitates elite rent-seeking).
Now, characteristically Lenin does not literally misrepresent Kautsky. But through his omissions one ends up missing the significance of Kautsky's definition of imperialism quoted above. Kautsky's underlying position is this: once post Cobden, industrialized/industrializing European societies embrace free trade and invest in their comparative advantage in industry and through technological innovations escape the Malthusian trap with growing populations (also, as Kautsky explicitly notes, through immigration from agrarian countries), they will start to need to import a growing number of agricultural goods. Under a regional federation or in pacific times, this state of affairs is splendid with all sides gaining from trade.
But in the context of great power rivalry the effects of such a liberal free trade policy makes one vulnerable to food blockades or other ways in which the need for food imports can be weaponized. (The risks associated with the experience of the blockade of grain shipments from Ukraine's ports this year was all too common during the nineteenth century.) And so, what Lenin treats as Kautsky's definition of imperialism is de facto a description of the effects of free trade on industrialized wealthy states in an imperfect security environment (or a Hobbesian state of nature in international affairs). And so they will try to control agricultural zones in order (and I quote Kautsky's (1914) Ultra-Imperialism) "to force them to restrict themselves entirely to agricultural production."
As hinted above, what's important about Kautsky's approach to imperialism, is that it foregrounds how as liberalism's political fortunes rise -- as it manifestly did in the middle of the 18th century -- with a peak moment the 1860 Cobden–Chevalier Treaty (an Anglo-French free trade agreement, including most favored nation clauses that facilitated more such agreements) -- it generates the seeds for imperialism, absent a wider political settlement. To the best of my knowledge only Kautsky noticed how liberalism's political success generates a dynamic that threatens to become self-undermining. (I don't mean to suggest the lesson wasn't later learned and applied!)
That is to say, domestic liberal economic policies require, once implemented, transnational political responses in order to be managed. And is clear from Lenin's description, Kautsky anticipates this point. I don't mean to suggest Kautsky is the first to notice the need for transnational liberal institutions -- Kant, Mazzini, and others had argued for it --, but rather Kautsky recognizes that such institutions will be needed to solve the political problems that are the effects of embracing free trade.
Here, too, Lenin's approach to Kautsky is literally true, but turns out to be misleading through his omissions. What's key to Kautsky's analysis is not the possibility of international cartels who manage trade in the way Deutsche Bank manages German industry, but rather (and now I quote Kautsky directly), "the result of the World War between the great imperialist powers may be a federation of the strongest, who renounce their arms race." (Recall also here my discussion of Luxemburg's criticism of Kautsky; and especially here where I discuss Kautsky's 1911 proposals). Such a federation would also turn the zero-sum political environment into a context in which the gains from trade would generate mutual prosperity and security.
And in so far as international institutions like the IMF and World Bank act as 'cartels' for capital/finance, then these, too, serve the same interest. Either way, from a liberal perspective Kautsky points the way toward the future, and turns out to be quite prescient and even helps explain why the internal contradictions of capitalism have not been the ultimate undoing of liberalism, so far.*
*I thank the students of ECON.225S.01.F22 at Duke University for discussion of these issues.
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