THE STRUCTURE OF MODERN IMPERIALISM

© Alan FreemanCalgary June 1st 2016

Sources• Most data is from the Geopolitical Economy Research Group Data Project

(GERGLE)• Slides 10 and 12 from Paul Kellogg (thanks Paul!) • GERGLE uses public sources (in this case, United Nations and World Bank)• Users question its data critically and supply better data if need be• Users define geoeconomic or geopolitical regions

• in this presentation ‘China Region’, ‘Global South’, ‘Industrialised’, ‘NICS’, ‘Eastern Europe’

• And make their own calculations (for example GDP per capita)• If you want to be actively involved contact info@geopoliticaleconomy.ca • We’re not yet ready for inactive users

What really happened in 1990?• Until 1990, all major world regions

were growing faster than industrialised world including USSR

• China (see slide 8) did not accept shock therapy and continued to grow

• Russia did: real GDP almost halved in 10 years

• 2000 reaction, headed by Putin restored growth to level of the industrialised world (or just above), but the level was much lower (because of the lost years)

• Much of the left concludes: Russia, China are ‘imperialist’ or ‘sub-imperialist’

• Elsewhere, we argue this does not fit the political facts

• Here, we examine the economic facts -

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Real GDP ($US2005) indexed to 1970=1Without China and NICS

Eastern Europe Global South

Industrialised USSR

Two worlds•The world is divided into two groups with widely different incomes

•The industrialised nations, with a population one-fifth of the world (otherwise known as ‘global North’ or ‘wealthy’

•And the rest•The GDP per capita of the first group is between ten and forty times greater than the second

•This inequality between nations is the main source of inequality in the world•Not often mentioned in the global North’s discussions about inequality

•Since the Russian revolution, only four countries have joined the industrialised world•South Korea, Taiwan, Malaysia and Singapore (just over 1% of world population)

•Hong Kong has a high level of industrialisation; we included in the ‘China Region’ because it is now governed jointly with China mainland

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Nominal GDP relative to Industrialised Countries

China Region Eastern Europe

Global South NICS

USSR

• Graphs show GDP relative to industrialised world

• Structural re-adjustment’ halved the GDP of south

• Shock therapy shrank GDP of Russia by factor of 10

• From 2002 onwards, some restoration: but Russia still at the same level as the South

• Dzarazov analysis: Russia has been ‘pushed back’ into dependency

One-third the income, four times the population

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China Region Eastern Europe Global South USSR

• The last slide showed ratio of total GDP

• But the population of the global North is one-fifth the population of the rest

• Disparities in GDP per capita are therefore even bigger

Note: This slide uses real GDP; the last used nominal GDP. Real GDP illustrates growth better; nominal is a better measure of inequality.

CATCHING UP….….OR HELD BACK?

THE DEVELOPMENTALIST ILLUSION

This difference is not because the industrialised countries grow faster

Actually, they are the slowest-growing country groupThe difference is because the industrialised countries hold back the

poorer countriesThis is the fundamental shape of modern imperialism

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Real GDP ($US2005) indexed to 1970=1

China Region Global South

Industrialised USSR

The USA, Europe and Japan are the lowest growth nations. Since 1970:

• Global North has grown by a factor of 3

• Global South has grown by a factor of 5.4

• China has grown by a factor of 39

• Former USSR has grown by a factor of 3: it is level with the bottom

What is really happening to the US economy?

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US real GDP growth

The US fall from productive dominance

Thanks to Paul Kellogg for these data!

Outward investment relative to inward

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Transition

The not-so-mighty dollar

SO HOW DOES THE USA SURVIVE … AND WILL IT?

US strategy – supported by Europe and Japan – is to maintain a

monopoly of technology, keep control over primary resources,

make up a financial deficit by sucking up the savings of the rest of the world,

secure ownership of foreign resources by the export of capital,

and set unequal terms of trade by control of world markets

The instruments are control of finance capital and investment capital

ARE RUSSIA AND CHINA ‘NEW IMPERIALISTS’?

Test 1: geopolitical – their actual military involvement (take-home question: how many

third world countries are in NATO?)Test 2: what do they do with their capital?

Share of world foreign capital holdings 2014

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1990

1995

2000

2005

2010

2014

Transition Rest China Industrialised

Holdings of Foreign capital in 2012

20,284,423

19,864,730

10,839,728

6,010,727

3,457,984

1,765,174

1,658,279

1,450,450

765,334

664,090

648,711

380,889

Euro Area

United States

United Kingdom

Japan

Hong Kong

China Mainland

Canada

Norway

Russian Federation

Finland

Korea, Republic of

Brazil Foreign capital =

Foreign Direct Investment

+Portfolio

Investment+

Other Investment

(IMF categories)

• Another look

The Pareto Chart (red line) shows the percentage of total capital accounted for

Thus 95% of all world capital is held by the first four geopolitical entities

Who have just over a fifth of the world’s population

Addicted to finance

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Total Investment Outflows

China

The Rest

Industrialised