First stab: Lenin on Imperialism, Polanyi on Commodification

*long read alert: you may be bored by this* *written last Sun*

So, it’s been a compact week. I find it difficult to shift suddenly from thoughts about the deceased Mr. Chau (and all the inaction & norm-making that led up to that particular concentrated moment of suffering all on 1 person instead of karma on all of us in different proportions to their ‘sins’ of course), about communication in intimate relationships of 2 and in a collective, about populism turning right seen from CUSP ‘king jongs’ (group discussion on certain social issues let say), …… AND the joy of being an official member of the university (I got my card today!).

Another thing is that I often find the process of reading immensely enjoyable because ‘the number of insight per page is very high‘ (Quote a professor at uni on Acemoglu & Robinson’s paper (they are authors of ‘Why Nations Fail’), a comment to which I wholeheartedly disagree). But then I am quite unable to describe or share what I’ve learnt with others, except in some super dry & rigid ways when obliged to. (See this below, something I’m not entirely happy with, but could be a useful summary for sb interested in Polanyi). So I want to try to relate the awe I felt in readings and work more by first spilling them out clearer for myself. Please DO NOT expect anything neat (you won’t if you know me well enough).

波蘭尼(1886-1964)生於奧匈帝國,為著名經濟社會學家。他在著作《鉅變》(The Great Transformation) 中要解答的問題是︰為什麼歐洲在經歷1815-1914年的百年和平之後,會迎來一戰與法西斯主義崛起下的二戰?他認為這場鉅變的政經根源,就是國際社會不顧一切地堅持一個不可能的烏托邦任務︰建設一個自我調節的市場(self-adjusting market)。市場化的進程步向毀滅人類與自然之路,因此激發起社會的自我保護運動 — 此互動被稱為雙向運動(double movement) — 但這卻不得不窒礙市場的自我調節機制,最終導致整個社會體系的崩潰。

…作為出路,他認為我們應接受經濟必然鑲嵌在社會體系之中的現實,及社會自我保護的必然︰  ‘Laissez-faire was planned; planning was not.’ 一定的市場管制不會侵害、反會增加大眾的自由。

…在我們的讀書組裡,我們談到了幾方面的問題:書中所述的歷史現象能否對照今時今日?波蘭尼如何看待社會與階級?這些觀點與馬克思主義有什麼分歧?波蘭尼對運動主體性的解釋是否不足?對於出路又是否過份樂觀?

波蘭尼(1944)《鉅變》讀書組筆記 , Oct 2019 https://docs.google.com/document/d/1x7x8cEB_ywi0bdUcRrdJ-LtvbJuhupTLLR_RaKmIclg/edit

Just quoting it bores me 😀 The language is sooo dry.

soooooooooooooooo let’s get an Anna’s dive into Lenin’s imperialism. plus some looking back at Polanyi as a comparison.

**

So Lenin’s Imperialism. my impression of it….

… is that it’s a very, very accessible read. The old-fashioned manner in treating data (think of 1917) often adds an authenticity & sincerity in what the author is trying to show and argue for with the aid of the data – Lenin quoted a lot from ‘bourgeois economists’ to describe the process of capital concentration and centralisation in pillar industries and banks around the world. It’s quite colloquial and Lenin walks you through definitions & logics in very relatable and easy manner.

So the most important contribution of his book to my thoughts, as with Polanyi, was filling some gaps in concepts and terms that I’ve heard of for like next to a million times: ‘BANKS’, ‘FINANCE’, ‘MONOPOLY CAPITAL’, ‘MARKET’, ‘DOUBLE MOVEMENT’, blah blah blah, and of course ‘IMPERIALISM’ (fuck it). This probably isn’t something shared by ‘layman’ into the field of leftist political economy studies, but I guess it could well be for some peers sort of ‘raised’ in these concepts in their uni years. They fly around stuff I read like… flies. Used but not explained. Sort of like the concept of ‘populism’.

It IS supposed to be something so easy and intuitive that you get right away, but then you realise no, you don’t REALLY get it. Banks just happen to be this villain that brought down a ‘financial system’ and an ‘economy’, and this is the crisis of ‘neoliberalism’ in the age of ‘imperialism’ based on the ‘IMF’ exploitation of debtor countries through ‘structural adjustments’…… Oh god, spare me.

So Lenin sort of gives a really clear and accessible and ‘ah!’ definitions walking me from industries, to banks, to ‘finance’, to export of capital, to economic division of spoils by a monopolistic industrial syndicate, then to the political division of territories by an oligarchy of powerful states. I now get why people ask you to read the originals. It’s good advice in the case of the concept ‘imperialism’.

*

Going into it.

If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism.

Such a definition would include what is most important, for, on the one hand, finance capital is the bank capital of a few very big monopolist banks, merged with the capital of the monopolist
combines of industrialists;

and, on the other hand, the division of the world is the transition from a colonial policy which has extended without hindrance to territories unseized by any capitalist power, to a colonial policy of monopolistic possession of the territory of the world which has been completely divided up.

Lenin, V. I. (1999). Imperialism: The highest stage of capitalism. Resistance Books. (列寧《帝國主義論》/帝國主義是資本主義的最高階段) 

That’s the main idea, two sides to ‘Monopoly’ – first, monopolistic combines of various industries + centralised director of collective capital, banks acting as the capital provider = financial oligarchy; secondly, monopolistic colonial possession of the whole globe by am oligarchy of rich countries.

1.

So first of all, concentration of production and formation of monopolies. Lenin used convincing data to show how firms amalgamate into monopolies, sort of like big fishes eating up smaller fishes only to be eaten up by an even larger fish in the online game, and he stresses on how like 3/4 of the energy or raw material consumed in a sector was consumed by like 1/100 of the total companies, revealing the extent of monopolies in multiple industries (esp. heavy industries like coal, oil, electricity) and multiple countries.

That fish-eat-fish process happened after the era of free competition of 1860-70s following the crisis of 1873, as smaller firms starved of sales and revenue were easily eaten up at a heavily discounted price by larger firms that were able to smooth their income. So we were passing into the era of monopoly especially since the boom in late 19th c. This proved that production had become increasingly socialised – production in an industry became coordinated on a level never seen before by huge, complex single entity spanning across countries, as per Karl Marx’s theory.

  • For some reason his description of monopolies through % total raw materials consumed/ goods sold vs. % the companies stood from the whole really helped me to grasp the idea of ‘monopoly’. We have always heard of big MNCs as an integral part of our lives, but you know, it’s sort of *not really registered* onto our minds how extensive & invasive those monopolies are. Quote:

And while at that time it appeared to be something novel, now the general public takes it for granted that large spheres of economic life have been, as a general rule, removed from the realm of free competition.

Financial Organization of the Capitalist Industry and the Formation of Monopolies – Outline of Social Economics Tübingen, 1914. Quoted by Lenin

2.

Secondly the banks – the fish eats fish data went even crazier, and there were new forms of ‘eating’ – annexing, making you an affiliate, making you dependent in 1st to 3rd degrees, leaving like 6 bank syndicates out of an original 100+ in Germany. Banks are at the same time expanding super rapidly in their number of branches. So I really liked Lenin’s river allegory for banks: the different branches forms …

… a close network of canals which cover the whole country, centralising all capital and all revenues, transforming thousands and thousands of scattered economic enterprises into a single national capitalist, and then into a world capitalist economy.

There you get capitalism as a concrete reality, not just an ‘-ism’. Every ATM and bank branch you walk past is like a water fountain of capital flushing around, performing the function of oiling and being part of the capitalist cells running in accordance to the capitalist order. Sort of like a body.

The power of banks is described here in very clear mechanisms (was I too dumb to see? Or writers kept on mystifying it or assuming it’s known to all?):

  • Scattered money capitalists (in form of banks) get transformed into a single collective capitalist through dominating the personal, commercial and industrial current accounts of the whole society. They used to be auxiliary honest middlemen, but not anymore after their super-amalgamation into monopolies/ oligarchies.
  • Their ability to ascertain exactly the financial position of every user – they can control and influence them by restricting, enlarging, facilitating or hindering access to credit. They provide you with the system of ‘water pipes’ essential to your streams of income and revenue and payments, and they CONTROL where to build them, terms of your access to it, size of the water tap, etc.
  • Their direct control over big enterprises by acquiring shares and appointing members onto the Board of Directors. Their personal union as supervisors with the industries or commercial entities , steering forward or killing off the entire industry by throwing in or taking away the necessary funds.

3.

Finance capital. Lenin purports that Hilferding’s definition of it is complete if the history of the rise of financial capital FROM the merging of nascent monopolies in bank and industries is added to it:

A steadily increasing proportion of capital in industry ceases to belong to the industrialists who employ it. They obtain the use of it only through the medium of banks which, in relation to them, represent the owners of the capital.

On the other hand, the bank is forced to sink an increasing share of its funds in industry. Thus, to an ever-increasing degree the banker is being transformed into an industrial capitalist.

This bank capital, i.e. capital in money form, which is thus actually transformed into industrial capital, I call it ‘finance capital’…

…Finance capital is capital controlled by banks and employed by industrialists.

R. Hilferding, Finance Capital, 1912

So this financial oligarchy coming out of monopoly industrial + bank capital exerts its power in many ways. First: the holding system where a mother company can control a daughter company only by buying out like 40% or less of its shares (since other scattered shareholders find it impossible to unite), which in turn can do the same to give birth to granddaughter companies with investment that is just a fraction of the latter’s worth.

The mother can deny legal obligations to the granddaughters through carefully hidden links. Oh, think of the Berlin Water holdings company I reviewed in a case study, it pulled this trick to fool the public: so a daughter company *appears* to be public because the Berlin government created a mother company that then ‘adopts’ this originally-public child, then sold the mother to two global water provision sharks:

柏林水務(Berliner Wasserbetriebe, BWB)是繼市政石氣及電源供應商後,該市最大的公有資產。早於1994年,柏林參議院的兩大政黨,基督教民主黨(Christian Democrats)與社會民主黨(Social Democratic Party,SPD)先將柏林水務重整,成為按私營法管理的公營公司,再於1998年正式作私有化的決定。政府原本更提出全面私有化的計劃,在綠黨、PDS、工會反對及房屋協會威脅司法覆核下,才改為部分私有化。

這場私有化最具爭議性的地方,是政府與私人公司之間的秘密協議,及用以掩蓋私有化的複雜企業架構。政府先成立了一個新的控股公司Berlinwasser Holding(BWH),再將柏林水務變成BWH旗下的子公司。於1999年,RWE Aqua Ltd.與Veolia與政府簽約,以共2.8億德元 (€ 1.43 億)各得BWH 24.95%股權,成為柏林水務的幕後夥伴,同時掌控其母公司BWH的國際業務。往後的三十年,政府都不能取消或重新談判這份秘密公私合營合約。2004年,首四年的水費凍結期過後,柏林水費出現15-20%的大幅漲價,變成全歐洲最貴。

2011年柏林水務公司回購: 背景 https://zh.wikiversity.org/zh-hk/%E5%85%A8%E7%90%83%E5%9B%9E%E8%B3%BC%E5%85%AC%E5%85%B1%E8%B3%87%E7%94%A2%E6%96%B0%E8%B6%A8%E5%8B%A2#2011%E5%B9%B4%E6%9F%8F%E6%9E%97%E6%B0%B4%E5%8B%99%E5%85%AC%E5%8F%B8%E5%9B%9E%E8%B3%BC

Thinking in terms of mothers and adoptions make this dry, legally dirty trick thing look a tee-bit more interesting.

Lenin also described the other ways for finance capital to enjoy superprofits.

  • Issuing floating of companies, stocks and state loans: banks can anticipate monopoly profits from a corporate acquisition of small firms and water up the capital value by crazy %.
  • Bond issues: bonds are essentially tradable claims of ‘I owe you’s (IOUs). The absolute monopoly banks have in issuing bonds get them to keep 10% of the borrowed sum.
  • Security issues: securities are essentially financial instruments representing the holder’s ownership status over some equity or some IOUs (debts). Issuing them gets you like a crazy % of profit because it’s a monopoly.

*

It’s been almost a week and I realise how much is lost over this short span of time – I’ll bring chapter 4 onwards to my face before continuing. This is an important record even for myself as all that’s left are blurry chapter titles for me rn…

Anna x

Author: Veronique

To be tenacious, patient and independent.

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