First Published: Canadian Revolution No. 4, November/December 1975
Transcription, Editing and Markup: Malcolm and Paul Saba
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Imperialism and Canadian Political Economy by Workers Unity (Toronto) begins by correctly stressing the importance of the debate presently taking place within the Canadian left around the “national question”. The elaboration of an objective and scientific analysis of Canada’s political economy (and more specifically of the position which Canada occupies in the international imperialist system) is the most pressing “concrete analysis of concrete conditions” to which Canadian Marxist-Leninists must address themselves. While the accumulated experience of the international working class movement can be of immeasurable value in helping us to understand certain crucial political problems (for example, social democracy), a correct strategy and tactics for dealing with these problems can only be based on an assessment of the concrete forms these questions have assumed in Canada. This assessment, in turn, must be based on a correct understanding of the fundamental characteristics of the Canadian political economy.
Because the Workers Unity Collective (Edmonton) is convinced of the importance of this debate, and because we are also convinced of the importance of forums like CANADIAN REVOLUTION for the development of the Marxist-Leninist movement in Canada, we are taking this opportunity to present our criticisms of the position put forward by Workers Unity (Toronto). It is our hope that our criticisms will serve to further this debate.
Before continuing we must stress that the following article is not an exposition of our position on the national question. Rather, this article has two functions. It is an attempt to identify what we feel are some important errors made by Workers Unity (Toronto) in their analysis. It is further an attempt to draw out, through a critique of this analysis, a set of questions and propositions which we feel that Marxist-Leninists must address if we are to reach an understanding of the national question in Canada. Nonetheless, since the Workers Unity Collective (Edmonton) does have a position on the national question, and since that position obviously forms part of the perspective from which we criticize Workers Unity (Toronto), we will briefly summarize our position as follows:
The main characteristic of the development of capitalism in Canada is that this development has always taken place under the domination of one or another foreign imperialism. At no point in this country’s history has it been truly economically independent, at no point has Canada produced a genuine national bourgeoisie which actually controlled the Canadian economy and which attempted to develop the country as an independent capitalist power. For this reason we feel that at present Canada must be viewed as a type of neo-colony, which is dominated and exploited by the U.S. imperialist bourgeoisie. Because of the high level of economic development prevalent in Canada, and the absence of any genuine national bourgeoisie, the national question in Canada can be resolved only by a socialist revolution which can establish a truly independent Canada under the dictatorship of the proletariat.
This position is part of a tendency in the Canadian Marxist-Leninist movement which has existed since the Progressive Workers Movement articulated its position in the 1960’s. The clearest and most concise exposition of the fundamental tenets of this position can be found in the special issue of PROGRESSIVE WORKER published in 1969 entitled Independence and Socialism in Canada, a Marxist-Leninist View (PW, vol. 6, no.l). In spite of its inadequacies and errors on some questions, it has yet to be superseded.
Because our analysis has not yet, in our opinion, been worked out with sufficient rigour, we have chosen to criticize the analysis of Canada put forward by Workers Unity (Toronto) rather than present a detailed exposition of our own views. While our position is based in part on scientific investigation, it is also based on a general assessment of Canada and Canadian history which we feel to be correct, but which is not fully worked out in a scientific manner. We feel that the struggle of Canadian Marxist-Leninists to arrive at a correct understanding of concrete reality in Canada can best be served in this context (forums like CANADIAN REVOLUTION) by raising what we feel are the important areas to be investigated, and by suggesting lines of approach to these areas.
Our critique will raise a number of questions, both of method and of substance. In the first place, we will attempt to show that Workers Unity (Toronto) have fundamentally misunderstood Lenin’s Imperialism, the Highest Stage of Capitalism, and that this misunderstanding is reflected in their analysis of Canada. We will argue that by failing to recognize the limited scope of Imperialism (ie. that it dealt only with the economic characteristics of imperialism which Lenin pointed out were only a part of the phenomenon), Workers Unity (Toronto) have fallen into an economist error. We will further argue that Workers Unity (Toronto) have seriously misunderstood the focus of Imperialism, which was an analysis of a world-wide imperialist system, not an attempt to draw out a definition or set of characteristics of individual imperialist powers. Thus their attempt to apply Lenin’s five characteristics of imperialism to the case of Canada misses the point of Lenin’s work.
Our second major criticism of Workers Unity (Toronto) will deal with their adoption of Tim Buck’s “level of productive forces” criterion for identifying an imperialist country. It is our position that by adopting this criterion, both Buck and Workers Unity (Toronto) have lapsed into economism, an economism based on their misreading of Lenin. We will also attempt to indicate what we feel is the theoretical importance of the category of foreign ownership to any scientific analysis of Canada, and indicate some of the questions which any non-economist analysis of this country must address.
Finally, we will examine Workers Unity (Toronto)’s attempt to apply Lenin’s five characteristics of imperialism to Canada. In this section we will try to show that their attempt is simply unsuccessful. We will argue that this part of Workers Unity (Toronto)’s article is riddled with faulty reasoning, incorrect and distorted data, and dogmatism. In a more positive vein, we will again suggest some areas of inquiry to which Marxist-Leninists must address themselves.
Before presenting the body of our critique, however, we feel that it is appropriate to remark on Workers Unity (Toronto)’s style of argument, the way in which they present and support their arguments. Imperialism and Canadian Political Economy suffers throughout from sloppy analysis which is partially masked by loose terminology and rather dogmatic assertions. These assertions often take the form of references to unspecified groups or political tendencies which are alleged to make specific errors in political analysis. Thus, in the introduction to their article, we find Workers Unity (Toronto) stating with regard to the lack of agreement among Marxist-Leninists on the national question:
In fact, one of the major problems in resolving the national question’ is precisely the lack of a correct ideological and political framework...Very few positions begin with Marxist-Leninist science and principle, and proceed to concrete analysis. And so, we have the current endless ’colony vs. imperialist power’ argument, where moralism about the quality or quantity of oppression is substituted for scientific analysis towards a revolutionary strategy. (CR, vol. 1, no. 1, p.3)
We are at somewhat of a loss to understand the above remarks. The assertion that the debate in question suffers from the lack of Marxist-Leninist science and a correct political and analytical framework is either meaningless or arrogant. If Workers Unity (Toronto) means to say Marxism-Leninism is not being applied to the “national question” by anyone, they are simply wrong. Various groups, such as the CPC, CPC(ML), YS/LSA, and numerous independent Marxist-Leninist groups (the now defunct Progressive Workers Movement, for example), have issued positions which represent attempts to apply Marxist-Leninist analytical tools to the national question. Indeed, aside from a few Wafflers, most of whom claim to be Marxists, who besides the Marxist-Leninist left is addressing the national question? Macleans Magazine and the CIC?
If, on the other hand, Workers Unity (Toronto) means that none of the self-styled Marxist-Leninist analyses of Canada which have been brought forward in the last few years have in fact represented a correct application of dialectical materialism, they should have said just that. In the absence of any published critique of these positions by Workers Unity (Toronto),however, such an assertion would be dogmatic and arrogant. The kind of argument that goes: “only a correct analysis can be called Marxist-Leninist, and whoever is talking at the moment gets to define what is correct” is a travesty of scientific socialism.
As for the “endless arguments...where moralism...is substituted...” etc., who or what is Workers Unity (Toronto) talking about? It is, of course, impossible to state that someone out there is not substituting moralism for analysis, but the important question is what arguments are being dismissed as moralism? What is their actual content? Since Workers Unity (Toronto) does not specify names or the arguments being dismissed, this statement could serve as a blanket rejection of any number of political positions being put forth in Canada. This is not good enough.
As Workers Unity (Toronto) proceeds to enlighten us as to “some erroneous theories of imperialism today”, this pattern of indefinite references and the setting up of straw men is repeated. Thus, after accurately outlining Kautsky’s theory of imperialism as “the striving of every industrial capitalist nation to bring under its control or to annex all large areas of agrarian territory, irrespective of what nations inhabit it” (Lenin), Workers Unity (Toronto) goes on to assert:
Both (Trotskyists and bourgeois nationalists-ed.) accept the Kautskyite view that imperialism is chiefly the annexation or colonization of agrarian or semi-agrarian areas by large industrial states, and that it consists mainly of an aggressive and expansionist foreign policy. Imperialism is not seen as the direct continuation of capitalist production and exchange, but rather, as a policy that some capitalists (or capitalist nations) might engage in. (CR, vol. 1, no. 1, p.6)
The most outstanding fact relating to the above quoted assertion is that Workers Unity (Toronto) apparently feels no need to substantiate it. At no point in their article do they quote by name any bourgeois nationalist or Trotskyist saying anything like what the above quote says. The fact that in recent historical periods it is the Third World that has borne the brunt of imperialist aggression means that it is to this aspect of imperialism that many people have addressed themselves. But who has argued that the imperialist interest in the Third World is centred on the agrarian nature of these societies? Who has denied that imperialism does develop (albeit develop unevenly) industry in these areas? What Trotskyist or bourgeois nationalist has denied that imperialism is “the direct continuation of the system of capitalist production and exchange”? To attribute to a political group or tendency a position which they do not, in fact, hold is a serious matter. In the absence of any substantiating quotes from the YS/LSA or RMG (the main Trotskyist formations in Canada) and in the absence of any indication of who the “bourgeois nationalists” are, Workers Unity (Toronto) seems to be guilty of doing just that.
Marxism-Leninism will develop and grow strong in Canada by meeting and defeating the strongest arguments which can be advanced against it, not by knocking over straw men.
Workers Unity (Toronto) have attempted to “establish a Marxist-Leninist framework from which to begin to further analyze and debate the concrete conditions of Canadian society.” (CR, no. 2, p. 24) They base themselves on “the theoretical framework developed by Lenin in Imperialism the Highest Stage of Capitalism.” (CR no 1, p.3) We consider their effort to involve a fundamental misreading of Lenin.
The following discussion of Lenin’s ideas and Workers Unity(Toronto) interpretation is not simply an argument over ’what Lenin said’, although this is important. We uphold Lenin’s theses on imperialism because we consider them to be correct, not because he held them. Hence, our purpose is to articulate what we consider to be correct ideas concerning imperialism, and take full responsibility for them. At the same time, we think it is important to establish that they are consistent with the basic tenets of Marxism-Leninism, which history has proven to be the science of the proletariat. All quotations from Lenin are from Imperialism, the Highest Stage of Capitalism, Collected Works, volume 22 (Moscow), unless otherwise noted.
Workers Unity (Toronto)’s misreading of Lenin is partly due to apparently not recognizing the limitations of the pamphlet itself, which is sub-titled A Popular Outline. Although it is correct to say that “Lenin made an exhaustive study of both the historical trends in the development of modern capitalism and the economic and political developments which characterized world capitalism in the early 1900’s” (CR no 1, p.4), his pamphlet is not itself this exhaustive study. He makes this clear in his 1917 preface:
I was not only forced to confine myself strictly to an exclusively theoretical, specifically economic analysis of facts, but to formulate the few necessary observations on politics with extreme caution. . . (p. 187)
and in the text:
Later on, I shall try to show briefly, and as simply as possible, the connection and relationships between the principal economic features of imperialism. I shall not be able to deal with the non-economic aspects of the question however much they deserve to be dealt with. (p. 195)
Among aspects of imperialism not adequately dealt with in the pamphlet are the relations between classes and changes in the state in imperialist countries; the (changing) relations between the imperialist powers and dependent countries and oppressed nations; the internal development of dependent countries; the contradictions between monopoly and non-monopoly production; the ideological forms engendered by the new age; and the forms of political struggle appropriate to it. Some of these questions were touched on, and elements of their analysis indicated, but they were not the subject of the work.
Nowhere does Lenin indicate that the economic features he analyses are all that is fundamental to imperialism or that an analysis of the economic questions is sufficient to arrive at an adequate theory of imperialism. He simply argues that understanding “the fundamental economic questions” is necessary, and hence justifies his pamphlet.
Marxism holds that man’s activity in production is fundamental to his existence in society (’determinate in the last instance’), and that the economic system constituted by the relations of production is the basis of politics, ideology, the state, etc. But it is economism, not Marxism, to hold that an analysis of this basis is sufficient to an understanding of the whole, that the base can be understood in isolation from the superstructure, or that a political strategy can be deduced from an economic analysis. Analysis of the economic structure serves as a foundation for the study of class relations, from which political strategy is developed.
Hence, Lenin’s reservations on definitions in general and his definition in particular.
Since we will be referring repeatedly to this famous ’definition’, we reproduce it here in its entirety:
And so, without forgetting the conditional and relative value of all definitions in general, which can never embrace all the concatenations of a phenomenon in its full development, we must give a definition of imperialism that will include the following five of its basic features:
1. the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life;
2. the merging of bank capital with industrial capital, and the creation, on the basis of this ’finance capital’, of a financial oligarchy;
3. the export of capital as distinguished from the export of commodities acquires exceptional importance;
4. the formation of international monopolist capitalist associations which shhare the world among themselves, and
5. the territorial division of the whole world among the biggest capitalist powers is completed.
Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the division of the world among the international trusts has begun, in which the division of all the territories of the globe among the biggest capitalist powers has been completed.
We shall see later that imperialism can and must be defined differently if we bear in mind not only the basic, purely economic concepts – to which the above definition is limited – but also the historical place of this stage of capitalism in relation to capitalism in general, or the relation between imperialism and the two main trends in the working-class movement. The thing to be noted at this point is that imperialism, as interpreted above, undoubtedly represents a special stage in the development of capitalism, (p. 266-267).
In our opinion Workers Unity (Toronto) repeatedly slips towards a theoretical economism in restricting their analysis to narrowly defined economic questions and attempting to deduce a political strategy from this. They take Lenin’s exposition of the “economic essence” of imperialism and interpret this to mean that the essence of imperialism is economic and therefore the economic features are all that need be considered essential to its ’definition’. We think this tendency is evident in their treatment of imperialist foreign policy and support of Tim Buck’s sole test. In attacking the nationalists they say:
In the traditional ’nationalist’ argument, therefore, Canada is not an ’imperialist country’ for any of a number of reasons: ’we do not possess any colonies’ or ’we do not directly threaten other countries militarily’, or ’our direct investment in Third World countries is not very significant’, and so on. This defense of Canada as a non-imperialist country completely ignores the fundamental question of the mode of production and level of productive forces. It concentrates entirely on Canada’s ’imperialism’ as a foreign policy vis-a-vis Third World countries. What is this but Kautsky’s supposed Marxist views about imperialism revisited? (CR no 1, p.6)
This is followed by the Buck quote:
Possession of colonies is not the test of whether or not any state is imperialist – the sole test is the structure and the level of development which characterizes its national economy. . . What Lenin emphasized concerning colonies was that ’the territorial division of the whole world among the greatest capitalist powers is now completed’. That fact helped to illustrate the maturity of imperialism – not to define which were imperialist states. (CR no 1, p. 6-7)
Buck conveniently ignores that the completed division of the world simply set the stage for its redivision and increased imperialist rivalry. One of the important contradictions Lenin outlined was that between the young imperialist powers such as Japan, the U.S. and Germany, which had few colonial possessions, and the older empires of France and Britain. Buck wants to imply that we are reaching a time when an imperialist power such as Canada no longer will aggressively compete to carve out its own empire.
But, more importantly, by denying that foreign policy has anything to do with whether a nation is imperialist they in fact oppose it to the ’fundamental’ question. Yet it is just such an opposition which Lenin attacked in Imperialism. Kautsky was well aware of the changes in capitalism and the growth of monopoly. He chose to call it the stage of ’finance capital’. By ’imperialism’, he wished to refer only to the political question of foreign policy, and refused to see its dialectical unity with the international nature of finance capital. Workers Unity (Toronto) wants to restrict the ’fundamental’ meaning of imperialism solely to its economic structure. As Lenin said:
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 the very same basis of finance capital, (p. 270).
The result is a one-sided treatment of the question which fails to see the political in the economic and treats the latter is isolation from classes, politics, foreign policy and relations of dependence between nations.
But more than just Kautskyism is involved here. Workers Unity (Toronto) have gone even further and reduced the five economic features of imperialism to “the fundamental question of mode of production and level of productive forces”. In the passage quoted above, possession of colonies, (the territorial division of the world), and foreign investment (export of capital) are treated as foreign policy. While they do go on to discuss all five features in relation to Canada, they treat the last three largely as secondary consequences of the first two. This may in part be because the international economic features are implicitly political. So that the result of the tendency to look only at the purely economic aspects is a tendency to treat imperialism simply as an internal structure. It would seem that they take Lenin’s “briefest possible” definition that “imperialism is the monopoly stage of capitalism” (in all its manifold development) and interpret it in reverse to mean that monopoly capitalism is imperialism, and hence if the existence of monopoly capital is established then imperialism follows.
This in turn leads them to invent the category “imperialist mode of production”, (CR no 1, p. 4), and to consider Lenin’s five features as its characteristics. This is in error. Imperialism is a stage of capitalism; its basic mode of production is capitalist. This is not just a semantic quibble, as it might seem that if the new stage is to be called imperialism, then the name could be applied to all its features. The capitalist mode of production (the dialectical unity of the forces and relations of production) in the imperialist nations has become increasingly socialized in accordance with the laws of capitalist development (concentration, etc.). This has been one of the sources of monopoly, of finance capital. But the fundamental contradiction within the imperialist nations remains unchanged. Imperialism as a world capitalist system, one the other hand, has certain features which have nothing to do with defining a mode of production. Consider the territorial division of the world by the great powers, the export of capital to the colonies and dependent states and the resulting extraction of superprofits. This does not in any way characterize the mode of production in the imperialist country and the extraction of surplus value there. At the same time, when the rentier capitalist extorts a profit from a subject area, the surplus he is appropriating may be from either capitalist or pre-capitalist production.
Workers Unity (Toronto)’s confusion on this question is evident throughout their article. On the one hand they are trying to prove the existence of this “imperialist” mode of production. They therefore concentrate on the level of development of the forces and relations of production. But all they can ’discover’ is a capitalist mode of production. This necessarily results in emphasizing the first two features and dealing very inadequately with the last three.
A similar confusion is seen in Tim Buck (as quoted by Workers Unity (Toronto) in CR no 2, p. 26. In the first place, he situates “finance-capitalist imperialism” as a “specific historic stage of imperialism.” But the whole point of Lenin’s analysis is that imperialism is a stage of capitalism, not vice versa. We would assume this to be a misprint, except that the same passage is reproduced identically inC R no 2, p. 26. In any case, the main thing is that Buck goes on to claim:
Just as industrial capital typified a distinct and higher stage than merchant capital.out of which it evolved, so finance capital typifies a higher and distinct stage of development than the free competition, with separation of bank and industrial capital, out of which it evolved.
While it is perhaps unfair to read too much into such a compact statement, Buck appears to confuse types of capital with the historic evolution of a mode of production. Industrial capital is capital expanded in wage- labour production through the appropriation of surplus value. It is synonymous with, and presupposes the capitalist mode of production. Merchant capital, on the other hand, has existed since antiquity and continues to exist today. It is capital expanded by buying cheap and selling dear. It extracts its profit from whatever mode(s) of production it operates within (or between). But there was never a merchant capitalist mode of production. The capitalist mode of production did not evolve from merchant capitalism but from the feudal mode in a long and complicated historic process. Mercantilism played an important role in extending a money economy and stimulating commodity exchange, but the roots of industrial production lie in pre-capitalist production. Neither did the capital employed in capitalist production simply evolve from merchant capital. Some merchants invested their money into industry, transforming it into industrial capital. But so did guild masters and the landed aristocracy. Similarly, some transformed their capital into bank capital, engaging in usury. Like merchant capital, bank capital is in itself non-productive. But it extracts its profit from capitalist production when employed by industrialists. It also, for example, extracted a profit from slave labour production when loaned to cotton plantations. With the generalized application of capital to industrial production, merchant capital loses much of its independent power, becoming more a function of industrial capital. Bank capital, however, becomes increasingly powerful, as Lenin outlined. With the growth of monopoly out of free competition, the concentration of bank and industrial capital into fewer and fewer hands necessitates their unification. The biggest bankers are forced to intervene directly in production to assure a return on their capital through the production of surplus value, while the biggest industrialists must become bankers to assure a source of money capital for their industry. A financial oligarchy is thus created which concentrates both industrial and banking capital into a single finance capital. But this does not subsume the categories of industrial and banking capital, nor does it transform the basic laws of accumulation of capital in production. The mode of production (within the imperialist nation) remains fundamentally the same. We have attempted to draw out these various categories because one might get the impression from reading Buck that the three capitals he considers to ’typify’ certain historic periods are associated with differing productive epochs, with equally important transitions between them. This might give rise to the notion of an imperialist mode of production.
It is unfortunate that Workers Unity (Toronto) looked to Buck for a scientific analysis. We agree with them that the revisionist conclusions of the CPC today are rooted in the analytical conclusions of the ’30’s, and suggest that until these links are carefully exposed, all of Buck should be treated with skepticism.
Much of Workers Unity (Toronto)’s confusion as outlined above is a consequence of their interpretation of the use to which Lenin’s five features can be put, and of what he was describing.
Lenin’s Imperialism is an analysis of the development of the imperialist stage of capitalism up to 1916. Although he refers to the growth of monopoly in specific countries as a stage in their development, the primary focus is on the development of imperialism as a world system composed of a few “imperialist powers.” This is important because his five features were obviously not directly intended as criteria to determine whether a given nation was imperialist or not. In the 1920 preface he points out that:
The main purpose of the book was, and remains, to present, on the basis of the summarised returns of irrefutable bourgeois statistics, and the admissions of bourgeois scholars of all countries, a composite picture of the world capitalist system in its international relationships at the beginning of the twentieth century . . .(p. 189)
The “imperialist powers” Lenin discussed inevitably engage in imperialist wars to divide and redivide the world, both to strengthen themselves and weaken their enemies. They do so because, on the one hand, capitalism has in these countries outgrown its national boundaries and established itself on a world scale, while on the other it is still national in character. The imperialist powers did not achieve the stage of imperialism internally and then branch out into the world. (Even Kautsky did not maintain this). The internal development of monopoly and finance capital had been inextricably linked with the export of capital, the monopolization of sources of raw materials and colonies. Therefore the economy of imperialism was not something internal to a specific country, but a world economy. But this internationalization of capital requires political (e.g. military) as well as purely economic means, and hence the finance capital remains tied to a specific nation-state. Although the formation of international trusts and cartels tends logically to the formation of a single trust, a single ’ultra-imperialism’, in practice the epoch is marked by “the competition between several imperialisms”. (Lenin, p. 269)
Lenin makes the international nature of monopoly capital clear when he discusses the “four principal types of monopoly” in the chapter on The Place of Imperialism in History:
Firstly, monopoly arose out of the concentration of production at a very high stage. . . . Secondly, monopolies have stimulated the seizure of the most important sources of raw materials. . . . Thirdly, monopoly has sprung from the banks. . . . Fourthly, monopoly has grown out of colonial policy. . . .“ (p. 298)
He even establishes this in his ”briefest possible definition” of imperialism as “the monopoly stage of capitalism” where he points out that this definition “includes” the fact that “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 monopoly possession of the territory of the world, which has been completely divided up.” (p. 266) It is in this context that he talks of the imperialist states as becoming rentier states, and of the division of the world into creditor and debtor nations. And it is because of it that he includes as “purely economic concepts”, in his five-feature definition, the division of the world among the capitalist associations and the great powers.
In light of this fundamental international nature of imperialism (and the economy of imperialism), the question of whether a given nation is imperialist must be the question of where it fits into the imperialist system as a whole, its place in the “chain of operations of world finance capital.” (p. 264) This involves mapping out the basic structure of this system – the great imperialist powers and the relations of dependence they have forced on weak countries (nations) in dividing the world. Lenin dealt with these relations briefly in the chapter on The Division of the World Among the Great Powers:
... it must be observed that finance capital and its foreign policy which is the struggle of the great powers for the economic and political division of the world, give rise to a number of transitional forms of state dependence. Not only are the two main groups of countries, those owning colonies, and the colonies themselves, but also the diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence, are typical of this epoch, (p. 263)
and in the article A Caricature of Marxism where he discusses “imperialist economism”:
Economically, imperialism is monopoly capitalism. To acquire full monopoly, all competition must be eliminated, and not only on the home market (of the given state), but also on foreign markets, in the whole world. Is it economically possible, ’in the era of finance capital’ to eliminate competition even in a foreign state? Certainly it is. It is done through a rival’s financial dependence and acquisition of his sources of raw materials and eventually of all his enterprises. . . . Big finance capital of one country can always buy up competitors in another, politically independent country and constantly do so. Economically, this is fully achievable. Economic ’annexation’ is fully ’achievable’ without political annexation and is widely practised. In the literature on imperialism you will constantly come across indications that Argentina, for example, is in reality a ’trade colony’ of Britain, or that Portugal is in reality a ’vassal’ of Britain, etc. And that is actually so; economic dependence upon British banks, indebtedness to Britain, British acquisition of their railways, mines, land etc., enable Britain to ’annex’ these countries economically without violating their political independence. (Collected Works, vol. 23, p. 43-44)
It is important to note that the key feature of ’colonial’ status being described here is precisely its subjugation and control by the imperialist power, not its internal level of development. In general, colonies and dependent states were backward countries economically, and this was important to the struggles within them, but this was not a necessary condition of their ’colonial’ status. Imperialism “strives to annex not only agrarian territories but even highly industrialized regions.” (p. 268)
Since Lenin’s day the number of outright colonies has dramatically decreased due to struggles for national independence. However, the ’net’ of dependence remains strong. This has led Marxists to analyze the ’neo-colony’ as the predominant form of dependence today. It is to be expected that in some of these countries, capitalist concentration has reached a high degree. But if they remain ’economically annexed’, they remain ’economic colonies’. This is a point raised very clearly by the Progressive Workers Movement in 1969 in their special issue of the magazine on Independence and Socialism in Canada:
... it is not the cultural or racial composition, internal economy, or standard of living that decides a country’s colonial status, but the relationship of that country to other countries. It is unfortunate that, with the demise of this organization, their mainly correct assessment of Canada’s role in the world did not serve as a basis for the development of the Marxist-Leninist movement in this country.
From what has been said above it follows that in approaching the question of where a country fits into the chain of imperialism, of whether it is an imperialist country, a fundamental consideration must be its relation to the great imperialist powers – is it dependent, is it economically annexed? A whole series of factors are relevant to this – extent and pattern of foreign ownership, indebtedness, structure of production (underdevelopment or distorted development), trade patterns (is it a source of raw materials), political relations, alliances, foreign policy. We think this view is directly at odds with that of Workers Unity (Toronto), who consider the “sole test” to be the level and structure of development of the economy.
If Canada is looked at from this perspective, the most striking fact is the extent of foreign ownership of our economy, principally by American corporations. It has been the object of extensive analysis by Marxists, socialists, social democrats, liberals, and bourgeois economists, all of whom consider it to be of the utmost significance (one way or the other). Workers Unity (Toronto), however, tries to dodge this issue by deprecating its significance both theoretically and in fact. First they approach it in discussing the export of capital from Canada, declaring:
But, foreign investment is by no means the only, or the central feature which characterizes imperialism. But it should not be surprising that the Trotskyists, too, ignore the forces and nature of production in ’proving’ Canadian imperialism. (CR No. 1, p. 7)
Therefore the third of Lenin’s five features is not as central as the first two. Next they attempt to show that American ownership of the Canadian economy is simply in the normal pattern of inter-imperialist investment. They do this by comparing the ratios of U.S. investment in Canada to Canadian investment in the U.S. (6 to 1) with the similar ratio for the U.S. and Europe (2.6 to 1 and rising), without reference to the size of the economies involved. This proves nothing. Consider the following GNP’s (1969):
| Canada | $ 68 billions |
| U.S.A | $947 billions |
| Old ECM | $426 billions |
| All of ’free’ Europe | $673 billions |
(Source – article Imperialism and Capitalist Industrialization in New Left Review 81, by Bill Warren)
To equate the significance of the $12 billion U.S. investment in Europe with the $13 billion in Canada is ridiculous. Workers Unity (Toronto) then assert that although “Canada has the highest percentage of U.S. ownership . . . U.S. domination is a general trend in other ’advanced industrialist’ countries as well”, so if these aren’t colonies, neither is Canada, and anyway “the relationship is qualitatively different from that between a neo-colonial country and an oppressor imperialist state.” (CR No. 1, P. 7)
It is surely encumbent on them to show what this relationship is if they are going to declare it qualitatively different. This sleight of hand enables them to conclude that “foreign ownership” is (merely?) “a measure of the success and power of competing capitalisms in acquiring significant shares of each others’ markets and resources.” (CR, No. 1, p. 8). But as Lenin made clear, it is also a means of economic annexation. At some point quantity passes into quality. This circumvention simply won’t do.
But in any event, even by Workers Unity (Toronto)’s definition foreign capital must be seen as the instrument/appendage of the imperialism it issues from. It can’t be treated as part of the internal economy, when considered from the standpoint of classes, and competing imperialisms. We will see later how this fact throws a monkey wrench into Workers Unity (Toronto)’s empirical observations.
A further consideration in determining whether or not a country is imperialist is whether the country is an imperialist power. Does it contend with other imperialist powers in the international arena for ’spheres of influence’, ’colonies’ (in the broad sense), etc.? Does its state back up its exported capital? We have shown that Workers Unity (Toronto) defines this question out of existence as Kautskyism. Yet it was precisely these powers that Lenin studied in order to prove that their ’imperialism’ was in fact their monopoly capitalism.
Finally, in dealing with the purely economic aspects of imperialism, the question entails establishing the international nature of the country’s economy – the drive of its finance capital to divide the world economically, its tendency to become rentier capital, its attempts to monopolize sources of raw materials (including at least its own), its monopoly basis in exported as well as internal capital. And in the process, the historical concentration and merger of bank and industrial capital, the generation of a financial oligarchy and its world role is established.
In conclusion of part 2 of their article, Workers Unity (Toronto) claims that:
From our analysis, the principal features of monopoly capitalism or imperialism, as Lenin described them initially, do apply to the level of development of the productive forces in Canada. Monopoly capitalism is not a system imposed from the outside on to Canada. Through its own development internally, as a logical outgrowth of the stage of ’free’ competitive capitalism, Canada has developed to its present monopoly capitalist stage.
and explain that:
When we are speaking here of Canadian monopoly capitalism, again we mean by that, not that monopoly capitalism is an imported, imposed political and economic system, foisted on Canada, but that through its own internal development, Canada has advanced to the stage of monopoly capitalism, with a clearly developed, indigenous Canadian bourgeoisie, which is in alliance with one of the two superpowers: American imperialism. (CR No. 2, p. 33)
It is clear that by “indigenous Canadian bourgeoisie” they mean a Canadian finance-capitalist oligarchy, an imperialist class in its own right. We submit that they have utterly failed to establish this thesis on the basis of their data and analysis.
Although, as we have said above, we consider the application of Lenin’s five features to be an inadequate approach, a correct assessment of their relevance to Canada would be useful. We therefore now examine Workers Unity (Toronto)’s concrete application of them.
The first of Lenin’s five features deals with the concentration of production leading to the formation of monopolies which dominate economic life. The evidence cited by Workers Unity (Toronto) to prove that this condition obtains in Canada is that provided by Tim Buck and is quite reasonable as far as it goes. His evidence concerning the number of mergers and the concentration of capital in Canada is quite convincing. The Workers Unity Collective (Edmonton) are certainly prepared to go along with Workers Unity (Toronto) in their claim that capital has been concentrated in Canada. Indeed, had this not occurred, we should have to take a long, hard look at Marx’s law concerning the concentration of capital.
However, Workers Unity (Toronto) and Buck think they have proved much more. They think that this data knocks a gaping hole in the ’nationalist’ argument. Thus in part 2 of their article we find the following:
Although important quantitive changes have taken place in the Canadian economy and in particular in the area of foreign, primarily American, investment, no qualitative change in the political economy of this country has taken place to indicate that any characteristics or features of imperialism which Lenin outlined (and Buck described) have done anything but intensify, consolidate, and further develop. For example, has concentration of production and capital ceased to advance? Are we in a situation in which the growth, power, and control of monopolies and of the finance capitalists who own them has lessened? We would argue obviously not. (CR No. 2, p. 26)
We are at somewhat of a loss as to who or what Workers Unity (Toronto) is countering with this statement. We know of no one who would argue that the power of monopoly capitalism has lessened in Canada. All Workers Unity (Toronto) have said is that the laws of capitalist development as discovered and analyzed by Karl Marx apply in Canada. It should be pointed out that the laws of capitalist development apply whenever capitalism has extended itself. Data such as Buck’s could be gathered and conclusions such as Workers Unity (Toronto)’s be drawn for Indonesia and Argentina as well as for Canada, the U.S. or West Germany. And it is precisely at this point that Workers Unity (Toronto)’s refusal to deal with the issue of foreign ownership gets them into trouble (casual statements about their recognizing its ’importance’ notwithstanding).
We have already shown how Lenin was well aware that foreign investment was more than just a weapon used by imperialist powers in their struggles with each other, but was also a method whereby imperialist powers made economic colonies out of weaker nations while leaving their national soveriegnty and political independence intact. We believe that when Lenin referred to monopoly of production contributing to the growth of imperialist powers which contended for world hegemony, he was referring to monopolies which were developed within a national economy and represented one of the seats of economic power of a national ruling class. In the modern age monopoly and the concentration of capital have spread to all areas of the ’free’ world. The multinational corporation, one of modern imperialism’s most characteristic manifestations, is multinational only insofar as it operates in many different countries; it is still the product of a national economy and is based within it. The ultimate survival of a multinational corporation in a world increasingly characterized by revolutionary struggle is guaranteed by the military power of an imperialist state. Given this, a multinational corporation is ultimately responsible to its parent imperialist state (the ruling arm of the national capitalist class). The nationality of the corporation, that is, the country where its controlling interests reside, where the most important decisions are made etc., is usually the best indicator of which imperialist system it is a part.
Given this, what are the effects of Workers Unity (Toronto)’s ignoring of the nationality of the monopolies dominant in Canadian life? And they do ignore them. In the table in their appendix there is no indication of which corporations are foreign-owned. In their list of directors of the Toronto Dominion Bank there are no indications of how many directors are also on the boards of foreign- owned companies. For example, in their list of the top corporations in Canada in 1972 (as ranked by sales) (CR No. 2 p. 34), no less than five of the top seven are foreign-owned (only Bell Canada and CPR being Canadian – and even this is disputable). When one looks at the Canadian economy as a whole the degree of foreign ownership is quite striking. Recent government figures indicate that, as measured by assets, 70.8% of Canada’s mining industry (the third largest in the world) is foreign-controlled. Similarly 58.3% of manufacturing, 29.75% of wholesale trade and 14.8% of construction as measured by assets is foreign-controlled. If some sectors of manufacturing are looked at the figures are even more striking: rubber products – 93.1% of assets foreign-owned; textiles – 39.4%; wood – 30.7% ; paper and allied products – 39.4%; primary metals – 55.3%; metal fabricating – 46.9%; machinery – 71.8%; transport equipment – 86.6%; electrical products – 64.2%; non-metallic mineral products – 51.5%; petroleum and coal products – 99.5%; chemicals and chemical products – 81.5%; and miscellaneous – 53.9%.[1]
Figures such as these indicate that the fact of imperialist penetration of the Canadian economy should raise some important questions whenever the national question is discussed. However, Workers Unity (Toronto) apparently thinks they are of no importance in determining whether Canada is an imperialist power or not; they being, presumably, only an indication of one method by which imperialist powers contend with each other.
Their ignoring of the questions of foreign ownership and of the whole debate around it leads to the Workers Unity (Toronto) implicitly adopting a view of the history of the development of capitalism in Canada which is, we feel, fundamentally in error.
Their observations on this question are confined to one quotation from Buck:
Canada has evolved, from a group of isolated British colonies in North America to an imperialist state. Winning national sovereignty as a result of growing strength, plus the economic and political contradictions between Britain and the United States, Canada was transformed from a country with national economy and state policies characterized by free capitalist competition, to a highly monopolistic economy with state policies which reflect the merging of the policies and power of the state with the interests and policies of the finance-capitalist oligarchy. . . . (CR No. 2, p. 26)
This view of Canada is rather a rosy one. With phrases such as “winning national sovereignty” Buck presents a spectacle of a dynamic national bourgeoisie taking two of the most powerful capitalist countries in the world, playing them off against each other and pushing its way into the company of the select few as an imperialist power in its own right. Workers Unity (Toronto) offer no evidence to back up this rather heroic vision and if Buck offered any they did not feel it necessary to pass it along.
To make a clear case for Canada being an imperialist power in her own right, Workers Unity (Toronto) would have to demonstrate a) when Canada became an economically independent power and b) who the independent national bourgeoisie were and what they developed such that an unfettered development of capitalism leading to imperialism was achieved.
While a completely adequate Marxist-Leninist presentation of the ’nationalist’ viewpoint has not yet produced (though Progressive Worker’s last special issue is an excellent start), enough evidence from various sources and various political viewpoints has been published in the past few years so that Buck’s overview of Canadian history can be seriously challenged. We refer to essays by people such as Gonick, Naylor, Levitt, Drache and Laxer among others. We do not attempt to scientifically establish an alternate thesis here, but simply to describe its general outlines. On the question of Canada’s economic independence Workers Unity(Toronto)rely on Buck. When Buck talks of national independence we can safely assume he is talking of economic as well as formal political independence. His version of Canadian history sees (unspecified) contradictions between the United States and Britain, presumably in the latter part of the nineteenth century, leading to the relaxation of imperial domination in Canada which in turn allows for an assertion and maintenance of national independence. However we seriously question that there was any relaxation of imperial domination at this time. Rather we had at this time in North America a United States where the industrial bourgeoisie had just finished asserting its dominance (by means of a civil war) and had completed the subjugation of her national territory. A rapidly developing American imperialism was exercising hegemony in Latin America, divesting a moribund Spain of its Empire (Cuba, Phillipines), joining in on the rape of China etc. Canada as a storehouse of undeveloped natural resources and as a gateway to the vast markets of the British Empire could not fail to attract her attention. Nor did she. American investment in industrial branch plants (to breach tariff walls) and in resource extraction ventures started coming in volume. By about 1920 (according to various sources) total value of American investment surpassed British investment. A rising American imperialism challenging a slowly declining or overextended British imperialism for control of the economic resources of Canada may have led to contradictions between the two, but we have seen no evidence that these contradictions led to any significant relaxation of imperial domination. The economic history of Canada can be seen as, in part, a history of the slow, orderly and peaceful transfer of Canada from out of one imperialist system into another.
On the question of who comprised the independent national bourgeoisie which was supposedly laying the groundwork for a Canadian imperialism, Workers Unity (Toronto) has not a word. They just assume its presence. Since they never address the problem of foreign ownership or its control of various sectors of the Canadian economy, they have not laid even a minimum groundwork for answering the question, much less countering the ’nationalist’ position. This position maintains that a native industrial bourgeoisie never developed except in a limited, truncated fashion. The Canadian bourgeois class entrenched itself in the commercial and financial sectors of the economy where it acted as the agents of British, and later, American imperialism. For example, the growth of the railway system in Canada was not a process of free competition, but rather of state sponsored monopoly. It must be seen as a part of the British imperial expansion (in the face of American pressure) which Lenin stresses in the section VII of his pamphlet.
The extension of American cartels and the massive amounts of finance capital they represented precluded the free and unfettered development of a Canadian capitalism. Foreign, primarily American, capital dominates the resource extraction and manufacturing sectors which are those sectors which produce surplus value. This predominance of American capital in these sectors explains the underdevelopment of Canadian capitalism, particularly in the areas of research and development and the production of capital goods (i.e. goods which equip factories, mines etc.). (It should be noted that the high points of Canadian industrial research – CANDU reactors and STOL aircraft – are heavily government funded.) Another question concerns natural resources. If it is a characteristic of an imperialist power that it expands its influence through the world in order to secure for itself sources of raw materials, where does this leave Canada? She has never had to go in search of resources. In fact she has been so abundantly endowed that imperialist corporations have centred on Canada in their quest for resources. As Jack Scott says while disposing of Moore and Wells’ Imperialism and the National Question in Canada, “. . . is Canada one of the desperate participants, or is it a harassed object in the hunt. To ask the question is almost tantamount to answering it.” (CR No. 2, p. 41). And it is not an idle question which asks, given these natural advantages, how is it that so much is exported to little advantage for a supposed Canadian imperialism?
Many more questions such as the above could and should be asked of Workers Unity (Toronto). But as a general conclusion we must say that their attempt to ’whistle past the graveyard’ and ignore the whole question of American imperialist penetration has not advanced debate on the national question. They have fundamentally misunderstood what it is they were required to prove in order to make their case. We will now see how they fare in their attempt to demonstrate the finance imperialism of the Canadian state.
In discussing finance capital in Canada, Workers Unity (Toronto) claims that “the creation of a finance capitalist oligarchy, based on the merger of bank and industrial capital (finance capital) is more and more evident.” (CR No. 2, p. 27) What is their evidence? It consists solely of the growth of assets of the major banks and the ’personal linkups’ represented by the directorships in other companies held by directors of the banks. It is apparently assumed that a bank-corporate interlock represents a merger of capital, and /or that a bank director involved (assumed to be an oligarch) exercises control of the corporation (especially if he is president). Why? Lenin described such interlocks as one of the phenomena illustrating the merger of capital, but not the proof of it. Having interpreted Lenin as considering the banks “the controlling arm of finance capitalism” (CR No. 1, P. 8), they conclude that this is the case in Canada and hence (it seems) that bank directors are controllers. But if the banks are to be considered a “controlling arm”, it must be shown what they control and the mechanisms of this control. This would mean showing, for example, that through their securities holdings they have a controlling interest or effective club over various corporations (in spite of laws to prevent this); and /or that their power to control the money market enables them to coerce where they do not have legal control, and/or that specific interlocks involve men who actually control the blocks of capital involved (e.g. ownership) and so on. The proof that various capitals were merged would involve identifying the major blocks of capital in the country and demonstrating their interdependence, their real functional interlocks. This would serve to indentify any actual oligarchy, its extensiveness, etc. Workers Unity (Toronto)does none of this. Instead of a ’concrete analysis of concrete conditions’, or a genuine theoretical discussion, they have opted for a superficial correlation of data with an abstracted ’criteria’ from Lenin.
In their discussion, it is also apparently assumed that the evident monopoly the five major banks enjoy in ’banking’ in Canada makes them the “monopolists of finance capital.” Not only are the other financial institutions in Canada ignored, but, more importantly, so are the international money market (e.g. New York) and the direct links between an American company and its subsidiary. Are the Canadian banks the monopoly source of money capital for industry either in practice or potential? One cannot simply assume the banks’ ability to attract business is a matter of power, especially when dealing with giant (including foreign) corporations. How often are the American banks directly or indirectly involved in financing industrial ventures in Canada? We do not claim to know, but the question must at least be asked. Consider, for example, James Bay, Syncrude and issuing of bonds. Recently there has been considerable discussion of the difficulty of obtaining development capital for projects in Canada due to the tight New York money market. Funds are apparently being sought in Switzerland and the middle east. How does this reflect on the power of Canadian banking?
Having asserted that “Canadian capitalists dominate in the major banks” (CR No. 1, p. 8), Workers Unity (Toronto) later dogmatically declares:
. . . that although the banks are no longer ’modest middlemen’ and are large and powerful in their own right (as can be seen from TD’s holdings, assets, etc.), it is not because they are ’big financial companies’ or large industries whose product is capital (Statistics Canada viewpoint) which means that they control the economy. It is that they are the arm of finance capital, the vehicle of the various financial capitalists’ groupings in Canadian society, and as such unite and concentrate in themselves all the power of industry and finance in Canada. (CR No. 2, p. 28)
Are we to conclude that this “finance capitalist oligarchy in Canada” is ’Canadian’, that is, that the “Canadian finance capitalists” who “doominate in the major banks” constitute an oligarchy which controls all capital, including American? The equation of the “finance capitalist oligarchy” with the “clearly developed indigenous bourgeoisie” referred to in the conclusion is never explicitly made. We doubt that Workers Unity (Toronto) would consider American capital in Canada under Canadian control since no evidence of this is offered by them or anyone else we know of. Yet the proof of this bourgeoisie being “clearly developed” rests exclusively on an analysis of this oligarchy – a confusing situation.
On the other hand, it is clear that they consider the power of American industry and finance in Canada to be concentrated in Canadian banks. In addition to the above quote, this view emerges when what they consider to be “part of the finance-capitalist oligarchy in Canada is examined and their positions of control high-lighted” (CR No. 2, p. 27), that is, the board of directors of Toronto Dominion Bank. It includes, among others, the president of DuPont of Canada and the chairman of Gulf Oil Canada. Following Buck and Workers Unity (Toronto), we would have to conclude that this interlock represents the merger of the bank capital of TD with the industrial capital of Gulf and DuPont [2] (and in turn therefore with American finance capital). But if it cannot be established that the foreign capital is dominated and controlled by Canadian finance capitalists, we are left with a ’unified’ oligarchy which is bi-national in character.
Aside from the violence this entity does to Leninist theory, surely Workers Unity (Toronto) would not contend that one can deduce the existence of an imperialist state from the existence of a finance-capitalist oligarchy which is not even indigenous and independent of foreign capital (by independent we do not mean militarily in relation to some other superpower, but minimally, in control of its own national economy). Yet this is where their concentration on ’productive forces’ in order to deduce the existence of an oligarchy, their extreme elevation of the banks (in anticipation of what they are trying to prove) in order to downplay foreign ownership as an “equal areas of influence” theory, has led them.
It should be noted at this point that Workers Unity (Toronto) might have attempted to argue that Canadian industrial capital was merged with Canadian bank capital, giving rise to an oligarchy in control of part of the Canadian economy. This would have been a very different position. They would then have had to prove why this part was decisive and that it was truly independent of U.S. control. They would have occupied ground similar to Moore and Wells whose arguments were effectively criticized by Jack Scott. It seems that they wanted to sidestep this whole problem.
Before leaving the question of finance capital we would like to raise some points in relation to the empirical data on the banks provided by Workers Unity (Toronto). We want to emphasize that we have not studied the structure of banking in Canada and do not know its inner workings, relationships, etc. This is an extremely important problem, and one which Marxists so far have failed to solve. First, a minor point. The Financial Post Corporation Service basic card dated June 16, 1975 lists the assets of TD Bank Trust Co. and TD Realty Co. as $3 million and $41 million, respectively, not billions as printed in CR No. 1, p. 28.
In discussing TD Bank, Workers Unity (Toronto) declares:
From 1974 to 1975 in the first quarter there was a 32– rise in total assets which is attributed to an 86– growth in earnings by the bank’s international division which is responsible for 25– of the bank’s overall earnings.
We believe this to be in error. In the Financial Post Corporation Service current card dated May 28, 1975, increases in earnings by the bank’s international division are seen as the “principal factor” in increases in net income, total revenue and balance of revenue in the period 1973-1975. Total assets did increase 32–from January 31, 1974 to January 31, 1975, but a 21.5– (.86 x .25) increase in earnings could not possibly equal or cause a 32–increase in assets which are about ten times as large. Rather, assets are first increased and then loaned or invested to bring increased earnings. To assess the significance of increased assets, their source must be determined.
The most obvious and traditional source is in increased deposits by a multitude of private and corporate persons, each relatively insignificant. These ’thousands of millions’ are surely under the control of the bank. A second source could be a massive deposit by another bank or financial consortium under certain conditions. This would be a form of’channelled funds’. Does this sort of thing take place? It would have special significance in the Third World. In such a situation the bank would assume the investment risk, in return for the new business, increased earnings.
A third source is borrowing by the bank. The editors of MONTHLY REVIEW, (The Banks, Skating on Thin Ice, Vol. 26, No. 9) state that in 1974, “no less than 40% of the deposits of the large New York City banks consists of large certificates of deposits, money borrowed by the banks to facilitate the rapid growth of loans beyond otherwise practical limits.” This is short-term borrowing, necessitating their constant re-issue, and is indicative of bank weakness rather than strength. Has a similar practice developed in Canada? Do Canadian banks solicit funds from foreign sources? These questions are speculative and may be dismissed as such, but inability to readily answer them at least indicates the work needed.
The growth of foreign earnings by TD suggests a dramatic increase in the assets of its foreign branches. Is this increase due to exported capital or deposits attracted within the foreign countries. If the latter, is it from indigenous companies or foreign? How much of this business is in the Third World? we think that the analysis required to answer these sorts of questions is necessary if Canadian Marxists are to understand the role of the banks. If Workers Unity (Toronto) or other readers of CANADIAN REVOLUTION have such information we hope they will publish it.
The section of the article on the export of capital purports to establish “the export of capital as distinguished from the export of commodities acquiring exceptional importance and the facilitation of the latter by the former”. (CR, No. 2, p. 31). But the authors do not even indicate what the importance of the export of capital is in the structure of Canada’s political economy, much less its “exceptional” importance. They simply show that it has increased absolutely. Furthermore, they do not indicate what its motivation is or what its effect is. Obviously, profit is a motive, but does it bring superprofits} Does it control sources of raw materials, or contribute to the domination of other countries? Is it the export of surplus capital which cannot be profitably invested internally due to the over-ripeness of the national economy? The aggregate data unanalyzed is of little use.
Jack Scott, in his critique of the Moore-Wells book (CR, No. 2), discusses this question at some length. Since Workers Unity (Toronto) seems to occupy the same terrain as Moore and Wells on this question, and since the latter have made a much more detailed and extensive argument, we would like to refer the reader to Scott’s article. We will confine ourselves to a few observations.
1. By all accounts, most investment abroad by Canadian capitalists since the Second World War has been in capitalist and imperialist countries. No one has argued that these investments have any particular significance within the economies of, for example, the U.S., U.K., or Europe, that they indicate Canadian imperialist control within these countries. At the same time, foreign imperialists have been buying up an ever-increasing share of the Canadian economy (obviously a profitable area of investment), until they have overwhelming control of whole sectors. What sort of an imperialist class is content to have its own national economy steadily taken over in return for a miniscule piece of the economy of the nation taking over?
2 If one considers the investment by Canadian capitalists or banks in a highly underdeveloped nation from the standpoint of the exploited nation, it will quite correctly be seen as part of the overall imperialist penetration and subjection of the nation. And if a Canadian financier is making his millions off the export of money capital he can be considered a rentier capitalist, even an ’imperialist’. But the participation of Canadian capital (even if directly owned by Canadian citizens) in the overall system of imperialist dependence and capital flows is not sufficient to characterize Canada as imperialist. First Canada’s position in the imperialist chain as a whole must be determined; this has been discussed earlier. But even from the purely economic standpoint, it must be demonstrated that the export of capital is fundamental and necessary to the functioning of Canada’s national economy.
3. One would expect that Canada, as a part of the world imperialist system with a high per capita GNP and developed (although unevenly) economy, to export capital in various forms. And one would expect that with a part of Canada’s surplus accuring to indigenous capitalists, they would seek to make the best return they can. If they are unable to compete with foreign capital within Canada in the preferred sectors, they will attempt to export it to areas in which they can compete. Areas of high risk where many other capitalists hesitate to invest, but where returns are potentially high would be attractive to some, especially if their state is prepared to guarantee their investments with insurance. On the other hand, minority investments in lucrative foreign firms would indicate no particular desire to compete at all. Such rentiers would have to be seen as wholly dependent.
4. The imperialist nations tend to guarantee their capitalists’ investments, not with insurance, but with state power – military and economic coercion.
The two short sections in which Workers Unity (Toronto) apply Lenin’s last two features will be dealt with together. In their discussion of the division of the world among capitalist associations, Workers Unity (Toronto) make the point that Canadian financial institutions participate in various schemes and institutions designed to provide capital for imperialist ventures. This makes perfect sense – Canadian banks are sophisticated financial operators and have access to and control over large amounts of capital. However, this really has little to do with the phenomenon Lenin was dealing with. Lenin was talking about one of the methods by which finance capitalists compete with each other to divide up the world. The forms of economic competition have changed over the years but the essence remains. Workers Unity (Toronto) have not demonstrated that the participation of Canadian banks in the associations cited on page 30, of CR, No. 2 represents contention by Canadian capital in this sphere of imperialist rivalry. Canadian bankers as possessors of capital resources are of course able to buy into ’good deals’ wherever they are to be found but it is another question entirely as to whether Canadian capitalists, as representatives of a Canadian imperialist system, are able to compete with other capitalists in carving out spheres of influence or asserting their dominance over particularly fruitful ventures. In other words, are they independent actors or are they simply operating as best they can under conditions they do not control?
This brings us to the question of the state, for it is the state as possessor of economic, diplomatic and military power which provides the guarantees imperialist corporations need in order to operate. This question of state power is very important for Lenin made it very clear that military power – that is, war and the ability to wage it – are the heart and soul of the imperialist system. Workers Unity (Toronto) are correct to point out that many significant and important changes have taken place in the world since Lenin’s day but this does not, as Workers Unity (Toronto) seems to think, significantly alter or lessen the theoretical import of Lenin’s fifth feature. Lenin was not talking about a political analysis of where various countries fit in the pattern of international politics. He was talking about imperialist states dividing and re-dividing the world through the application of economic, diplomatic and military power. Lenin identifies as one of the basic economic features of imperialism the fact that imperialist powers are possessed of and are required to use this kind of power. We feel this is no less true today than in Lenin’s time though the actors have changed and the battlefield looks much different. We hope that it is not necessary for us to demonstrate that Canada has never and does not now possess the means to participate as an imperialist power in guaranteeing an imperialist system.
Workers Unity (Toronto) (and others) argue that Canada is a secondary imperialist power, the idea being that the two superpowers (U.S. and U.S.S.R.) contend with each other and in the process exert hegemony over the other imperialist powers. Canada, along with France, Germany and Japan, etc., are the secondary imperialist powers (this fact being deduced from the level of internal economic development). However much France, and the U.K. have declined relative to the U.S. and the U.S.S.R. or however severe the effects of disastrous military defeat on Germany and Japan have been to their imperialist ambitions, we would argue that all these ’secondary’ imperialist powers do possess or are acquiring economic, diplomatic and military power which makes them independent actors on the imperialist stage. The growing power of the ECM and Japan’s re-emergence as an economic and military power in South East Asia has no counterpart in the recent history of Canada. Instead in Canada it is a history of increased imperialist domination of our economic, political, and cultural life.
We would ask of Workers Unity (Toronto) what kind of imperialism is it that has no state to back it up? How must one describe the relationship between two imperialisms where one is heavily penetrated by the other and completely dependent on the other to guarantee its imperialist ventures? The answers to such questions as these would go a lot further to answering the questions of what Canada’s role in the world is, or what is the primary characteristic of Canadian political economy than does Workers Unity (Toronto)’s attempt to squeeze Canada into Lenin’s five features.
This article has been largely directed against the position of Workers Unity of Toronto. Our purpose, however, is not to discredit them, but to point out what we consider to be their mistakes and urge them to take these into consideration in conducting further investigation. It is in this spirit that we have raised a number of questions and problems which we feel need to be dealt with.
We have stated why we consider Lenin’s Imperialism inadequate to a complete theory of imperialism, even at the time of his writing. We suggest that it is imperative for Marxists to study other works and authors. It is especially important to study recent works which attempt to take into account changes in the structure and methods of imperialism since Lenin.
But the reason for doing this is not academic. We wholeheartedly agree with Workers Unity (Toronto) that the purpose is to help develop a revolutionary strategy in Canada. This is why the ’concrete analysis of concrete conditions’ is so important. It is the specific relations between classes, conditions of struggle and level of class consciousness which determine the character of a revolution and its development. In this regard we would like to note that in our opinion it is not necessary to establish that Canada is an ’imperialist’ or ’independent capitalist’ state for its revolution to be proletarian in character. Neither does the contention that Canada is in a neo-colonial relationship to the U.S. necessitate a two-stage revolution or a non-proletarian character. That is, the general theory and principles of Marxism-Leninism do not require such correlations. We raise this point because there is a tendency throughout a broad spectrum of the left to hold such positions, a tendency seemingly evident in Workers Unity (Toronto)’s concluding remarks. Whether this becomes a specific point of debate remains to be seen. The actual, concrete solution of this problem will only be reached through a rigorous, scientific investigation, as part of a growing revolutionary practice. We hope this article has contributed to this process.
[1] Figures extracted from tables reproduced in Warnock, Jack: “Canadian Sub-Imperialism? A reply”, THIS MAGAZINE, Vol. 9, No. 1, Mar-April, 1975.
[2] Which also has a director from the Royal Bank.