The Economics of Modern Imperialism

This work focuses exclusively on the modern economic aspects of imperialism. We define it as a persistent and long-term net appropriation of surplus value by the high-technology imperialist countries from the low-technology dominated countries. This process is placed within the secular tendential fall in profitability, not only in the imperialist countries but also in the dominated ones. We identify four channels through which surplus value flows to the imperialist countries: currency seigniorage; income flows from capital investments; unequal exchange through trade; and changes in exchange rates. We pay particular attention to the theorisation and quantification of international UE and of exchange-rate movements. Concerning UE, we extend Marx’s transformation procedure to the international setting. We use two variables in the analysis of UE: the organic composition of capital and the rate of exploitation, and we measure which of these two variables is more important in contributing to UE transfers. We research a time span longer than in any previous study. We also introduce the distinction between narrow and broad unequal exchange according to whether two countries are assumed to trade only with each other or also with the rest of the world. As for the analysis of the exchange rates as a channel for appropriation of international surplus value, we reject conventional approaches because they are rooted in equilibrium theory. We find very strong empirical evidence that exchange rates tend towards the point at which the productivities are equalised. This is only a tendency because this equalisation is inherently incompatible with the nature of imperialism. Finally, given its topicality, we apply our analysis to the relation between the US and China and find that China is not an imperialist country according to our definition and data.