Learning from classical theories of imperialism
A key hypothesis of this book is that the ongoing era from 1970–2007 may be in some important regards similar to the liberal epoch of 1870–1914. The 44-year-long liberal epoch a century ago was characterised on one hand by the second Industrial Revolution, free trade, free movement of capital and rapid globalisation; and on the other hand, by nationalism, freedom of sovereign powers to use violence, new imperialism, imperialist wars, worsening trade conflicts within and without the capitalist core (albeit still in the context of relatively free trade) and social turbulence in Europe as well as in many colonies and China. We also know the dramatic outcome of those processes:
the First World War.
For any historical explanation of the First World War, it is necessary to make numerous assumptions about relevant causal mechanisms, processes and their connections. An explanation also tells a temporal story about events, episodes and processes that led to the ‘Great’ War. There have been, and are, multiple possible explanatory stories about the causes of the catastrophe of 1914–18. None of them is self-evidently true or, for that matter, consensually accepted by researchers in the pertinent disciplines such as history, peace and conflict studies or IR. I discuss and assess the relative merits of different explanations in terms of the theoretical framework introduced in chapter 2 as well as in terms of assumptions about economic theories. However, additional concepts and theories are required and, equally importantly, a mere theor- etical reinterpretation and assessment is clearly not enough. A systematic assessment of the available empirical evidence is also needed. In dialectical argumentation, a researcher moves along complex cycles that criss-cross the same ground from different angles trying to identify weak points (of view) and looking for the best candidates among competing alternatives. Therefore, (s)he seeks a resolution that has the most balanced and strongest overall case;
it is not ‘the uniquely correct answer’, but the strongest and most defensible position. Moreover, the best available explanatory model, comprising the most defensible components for endorsement, always rests on relatively insecure ground. It is always possible to find a still stronger or more defensible position, that is, a model and story which is truer.
In this chapter I look at the explanations of the war given by liberal and
Marxist theorists of imperialism at the time of the First World War, or immediately after it. Classical theorists of imperialism saw the causes of the war in terms of long-term politico-economic processes. I relate their stories and causal accounts of imperialism and the war to the theoretical framework of chapter 2, and also discuss empirical and historical evidence presented by the classical theorists themselves. The point is that these explanations can clarify a number of principal components and aspects of the geo-historical processes that led to the war. Moreover, the comparative summary at the end of this chapter provides the basis for chapter 4, which analyses some of the layers and components of this explanation in more detail and also discusses more recent accounts of the war. Thereby, I try to build a comprehensive explanatory model of my own.
Classical theories of imperialism and war
Why did the great powers of Europe resort to competitive new expansionism and imperialism from about 1870 onwards? Why did they start to assume that imperial expansion was essential for their security? Why did this imperial expansionism eventually evolve into an arms-race between two military alliances in Europe? Classical theorists of imperialism – Joseph Schumpeter, Thorstein Veblen, John A. Hobson, Karl Kautsky and V.I. Lenin – were mostly concerned with explaining the processes of imperial expansion, but as it turned out, also developed a basis for explaining the war.
The Franco-German war of 1870–71 (preceded by the Second war of Schleswig in 1864 and the Austro-Prussian War of 1866, as well as various diplomatic crises) interrupted Pax Britannica. Pax Britannica refers to the half-century-long period following the 1815 Battle of Waterloo and the Concert of Vienna, which attempted to restore pre-French Revolution polit- ical order in Europe.1 During this period, Europe was relatively peaceful, although social and revolutionary restlessness broke out occasionally in a number of European countries, particularly in 1848, and although limited wars – such as the Greek War of Independence (1821–29), the Crimean War (1854–56) and the Franco-Austrian War (1859) – were fought in some parts of Europe. The British Empire controlled most key naval trade routes and enjoyed unchallenged industrial and sea power. Well into the 1850s Britain was virtually the only industrial economy in the world. Britain dominated overseas markets and favoured free trade and a strategy of informal colonial- ism. It controlled markets like China’s – forced open to ‘free trade’ by two opium wars in the 1840s and 1850s – without direct colonial administration.
While engaged in opium trade and wars in the East, the Royal Navy contrib- uted to the suppression of piracy and slavery in the rest of the world. Britain also went beyond the seas and developed and funded a universal mail system.
The Franco-German war completed the unification of Germany. In January 1871 the German states proclaimed their union under the Prussian King, uniting Germany as a nation-state. By that time the British had started to
reconsider their policies, also due to changes in their politico-economic pos- ition. The German victory over France and unification were major concerns and triggered additional discursive changes in Britain. In the mid-nineteenth century ‘imperialism’ had been seen as a negative term, associated with Napoleon’s efforts to turn Europe into a single empire. Moreover, for decades the prevailing opinion of British liberals was that the time of colonialism was drawing to a close. A leading critic of colonial possessions, Richard Cobden argued that colonies were economically and militarily unsustainable and wanted to substitute free trade for colonies. The United States had become independent almost a century earlier and had emerged as the biggest market for British exports. Even when the Indian Rebellion of 1857 was suppressed violently and the authority of the East Indian Company was assumed directly by the British Crown, no one was openly talking about an empire. In his Imperialism, The Highest Stage of Capitalism, V.I. Lenin depicted the prevailing mood of the mid-nineteenth century as follows:
In the most flourishing period of free competition in Great Britain, i.e., between 1840 and 1860, the leading British bourgeois politicians were opposed to colonial policy and were of the opinion that the liberation of the colonies, their complete separation from Britain, was inevitable and desirable. M. Beer, in an article, ‘Modern British Imperialism’, published in 1898, shows that in 1852, Disraeli, a statesman who was generally inclined towards imperialism, declared: ‘The colonies are millstones round our necks.’
(Lenin 1998 [1920]: 43)2 Still in 1872, Charles Dilke, a social reformist liberal politician, argued that colonies do not make sense in economic or in military terms: ‘no-one has ever succeeded in showing what effect upon trade the connexion [colonial ties] can have’ (Dilke 1999 [1872]: 23). White colonies such as Australia, Canada, New Zealand and South Africa had become increasingly autonomous in their policies. They taxed British exports one-sidedly, yet depended on Britain for their defence. In addition to the white colonies, Great Britain possessed ‘on the one hand garrisons such as Gibraltar, and on the other mere dependencies like the West Indies and Ceylon’ (ibid.: 20). Dilke saw two options: either separation or, preferably, greater contributions from the col- onies to make the mother country’s position more sustainable. Many others disagreed, however. Separation was no option. As competition with other industrialising countries and their producers increased, protected imperial markets began to appeal to vulnerable sectors of industry (Cain 1999: 9).
Many argued that both Britain’s power and internal stability depended on her global trading position. Colonies were not only markets in themselves but also provided the means for the military defence of the global network of trade. (Ibid.: 13) An official turn came in 1876 when Prime Minister Benjamin Disraeli – following his landmark speech in the Crystal Palace in
1872 and the Conservative election success of 1874 – declared that Queen Victoria would take the title ‘Empress of India’, indicating that ‘empire’ and imperialism should, from then on, be seen also positively. The empire was to form a customs union, a uniform defence system was to be created, and a central organ in London was to create a closer connection between the imperial government and the colonies.
Although in fact the British continued to practice free trade, the French were particularly quick to follow the newly declared British model. The extension of the French empire in Senegal and Sahara in 1880 was followed next year by the annexation of Tunis. Soon France was actively engaged in the scramble for Africa in 1884. French colonial expenditures and acquisitions served at least two purposes. The expansion of the French colonial empire was seen first, as a method of ‘rejuvenating’ the country after its humiliating defeat in the Franco-Prussian War. Second, politicians such as Jules Ferry (foreign and prime minister of France in the early 1880s) concluded that sheltered overseas markets would solve French economic problems, caused not only by German and American protectionism, but also by intensified US competition in the South American markets (Ferry 1998[1884]). Germany had reacted to economic depression with the adoption of tariff protection in 1879 and the United States followed suit in 1890. While the Russian Empire was continuously pushing for southward expansion, the emerging industrial powers of Germany and the United States – as well as Japan in the east – responded to British, French and Russian imperialism by joining the com- petition for new colonies in the 1880s and 1890s. Colonial wars and expan- sion, unexpected diplomatic manoeuvres, realignments, secret treaties, and complex strategic calculations characterised international politics of the era.
Thus Africa was divided between the European colonial powers and the colo- nial control in the Middle East and Asia was deepened and extended. Between 1876 and 1900, the total colonial and imperial area expanded from 46.5 million km2 to 72.9 million km2 and population from 314 million to 530 million people (Milios 2001: 114). In addition, Qing-China – itself about the size of Europe in terms of population and territory – became partially a semi-colonial area.
At the turn of the century, imperialism was a hotly debated political and academic issue. How should imperialism be understood and explained? Is there any moral or other rational justification for it? John A. Hobson, after he was pushed out of the academic community (because of his unorthodox views, Hobson was prevented from giving further lectures in Political Economy at the University of London), was recruited by the editor of the Manchester Guardian to be their South African correspondent. During his coverage of the Second Boer War (1899–1902), Hobson began to form the critical idea that imperialism was a result of the expanding forces of modern industrial capital- ism. In his Imperialism (1902), Hobson developed the concept that imperial expansion is driven by a continuous – but cyclically worsening and improv- ing – situation of overproduction and search for new markets and investment
opportunities overseas. Hobson’s magnum opus provided a lot of material for a number of subsequent theorists of imperialism, most notably Kautsky and Lenin (but also H.N. Brailford and Leonard Woolf, among others). Veblen reviewed Hobson and other early analysts, but his starting point was in some ways perhaps closer to Joseph Schumpeter’s liberalist analysis of imperialism and the war.
Joseph Schumpeter
It is worth starting with Schumpeter’s liberalist account as it laid the blame on the recurring pre-capitalist structures rather than on industrial capitalism itself.3 In his essay on imperialism, Schumpeter was both reacting to the neo- Marxist theories of Otto Bauer and Rudolf Hilferding and trying to explain the 1914–18 war. For Schumpeter, ‘imperialism is the object-less disposition of a state to expansion by force without assigned limits’ (Schumpeter 1989[1951]: 7). According to Schumpeter, the main cause of imperial com- petition among the European great powers was their outmoded form of non- democratic governance: princes and the customs of a pre-capitalist milieu as well as the absolute monarchical state. He stated bluntly that ‘imperialism is an atavism’ (ibid.: 85). There were no concrete economic reasons behind the late nineteenth-century imperialism. Imperialistic wars might have been profitable before the Industrial Revolution but since then, wars have no longer been cost-effective in any reasonable sense (ibid.: 22). Schumpeter equated rationality with the instrumentalist logic of homo oeconomicus and agreed with those mid-nineteenth-century British liberals who had claimed that overseas colonies are excessively costly. So both imperialism and wars must have been irrational; neither wars nor imperialism could have had any- thing to do with the general interests of capitalist society or with the inherent laws of capitalist development. Because of the processes of democratisation, individualisation and rationalisation that accompany the development of cap- italism and liberalism, ‘a purely capitalist world therefore can offer no fertile soil to imperialist impulses’ (ibid.: 90). Even more strongly, ‘capitalism is by nature anti-imperialist’ (ibid.: 96) and ‘where free trade prevails no class has an interest in forcible expansion as such’ (ibid.: 99).
The nineteenth-century nationalism and imperialism may have, in part, stemmed from the irrational need ‘for surrender to a concrete and familiar super-personal cause’ (ibid.: 14). More importantly, imperialism was caused by ‘that large group of surviving features from earlier ages that play such an important part in every concrete social situation’ (ibid.: 84). However, certain
‘subsidiary factors’ facilitated the survival of imperialistic dispositions and structures. In particular, the non-liberal and non-democratic political systems also made it possible for particular economic interests to dominate policy- making. Schumpeter was critical of cartels and monopolies and attempts to create protected markets. However, because trusts, cartels and monopolies can attain their primary purpose only behind protective tariffs, their emergence
requires also state actions. Competitive markets alone do not generate mon- opolies. At the request of special interests, the (anachronistic) rulers have often been happy to set tariffs to acquire revenues. For Schumpeter, if a firm could not survive without politically won markets, it had ‘expanded beyond economically justifiable limits’ (ibid.: 114). Since cartels successfully impede the founding of new enterprises, foreign investment outlets are also sought.
When export-hungry monopolists from different states crave the same mar- kets, ‘the idea of military force suggests itself’ both ‘to break down foreign customs barriers’ and to ‘secure control over markets’ (ibid.: 109). Empire, formal or informal, is the outcome. ‘Trusts and cartels . . . can never be explained by the automatism of the competitive system’ (ibid.: 117). They arise from state policy. Schumpeter’s preferred solution to the problems of war and imperialism was simple: thorough implementation of the principles of economic and political liberalism.
It is important to stress that in his analysis of imperialism, Schumpeter presupposed the basic conceptions of the neoclassical economic theory.
The central idea is that perfectly competitive free markets are stable and optimally efficient. A corollary is the so-called ‘Say’s law’, which states that the supply of any goods automatically creates an equivalent demand for goods.4 Schumpeter also relied upon Ricardo’s comparative advantage argu- ment for free trade, later elaborated into a standard neoclassical model by Eli Heckscher and Bertil Ohlin (a few years after Schumpeter’s essay on imperial- ism). Schumpeter’s analysis of war and imperialism was thus theory-driven and largely based on the liberalist idea of a harmony of interests in competi- tive laissez faire –markets: ‘Under a system of free trade there would be conflicts in economic interests neither among different nations nor among the corresponding classes of different nations’ (ibid.: 100).
At the time of the Second World War, E.H. Carr (1964[1946]: 41–62) famously identified the liberalist harmony of interests thesis as one of the causes of the First World War and also as a key source of the troubles of the interwar era. According to Carr, the harmony of interests thesis of classical political economy described an economy of small producers and merchants that ceased to exist with the Industrial Revolution. The thesis was rendered in some ways relatively plausible, however, ‘by the unparalleled expansion of production, population and prosperity, which marked the hundred years fol- lowing the publication of The Wealth of Nations’ (ibid.: 44).5 Yet no set of allegedly universal principles, such as the invisible hand of competitive mar- kets, can guarantee domestic or international peace. Actions grounded on assumptions of utopian harmony tend to take part in creating, reinforcing or deepening conflicts because universalist utopias often mask particular iden- tities and interests as universal, i.e. as necessarily shared by all. According to Carr (ibid.: 208–23), instead of presumptions of automatic harmony, there would need to be political mechanisms for resolving real conflicts by means of peaceful changes.
Thorstein Veblen
Like Schumpeter, Veblen explained modern imperialism largely in terms of dynastical habits of state-leaders and vested interests of business men.6 How- ever, Veblen’s analysis differs from Schumpeter’s at least in four important respects.
First, Veblen had first hand experiences of politics in the United States and was less convinced than Schumpeter that mere formal institutions of dem- ocracy such as regular multiparty elections would suffice to prevent aggres- sive and expansionist foreign policies. For Veblen, modern imperialism had demonstrated how slight the differences may be between people of sup- posedly autocratic states and those in constitutional democracies.7 Veblen observed American democracy – where no absolutist or monarchical institu- tions remained and where most male citizens had a right to vote – from within during an age in which political corruption and economic power abuses were abundant and explicit. At the same time, the US engaged in imperialism particularly in the Caribbean and Pacific areas and, eventually, also took part in the First World War (see Cramer and Leathers 1977: 238–40).
Second, Schumpeter based his case on the experiences of the mid-nineteenth century British liberalism, which appeared to oppose both imperialism and wars. However, for Veblen the development of free institutions in England arose partly as a result of the opportunity for common people to drift into peaceful habits of thought (ibid.: 244). In other words, according to Veblen, war itself tends to reinforce or restructure forms of agency and social practices and relations, also towards a more nationalist and aggressive direction. On the other hand, an enduring peace and absence of war may enable new practices and institutional possibilities.
Third, Veblen disagreed with Schumpeter about the harmony of interests thesis. Although modern machinery and techniques have enabled growth in productivity and per capita production, it is an illusion to believe that the acquisition of wealth by property owners automatically serves the common good. The problem is that this illusion may serve to legitimise the rights to acquisition through ownership arrangements and financial operations, including acquisition from other parts of the world, as the ‘general’ interest of society and a nation. Veblen distinguishes carefully between an early capitalist enterprise and a big, modern business enterprise:
The institutional animus of ownership, as it took shape under the discip- line of early modern handicraft, awards the ownership of property to the workman who has produced it. By a dialectical conversion of the terms, this metaphysical dictum is made to fit the circumstances of later com- petitive business by construing acquisition of property to mean produc- tion of wealth; so that a business man is looked upon as the putative producer of whatever wealth he acquires. By force of this sophistication the acquisition of property by any person is held to be, not only expedient