Sunday, 14 December 2008

Kautsky and Colonialism

Kautsky argued that a driving force of colonial expansion was the need of capitalism to draw in an expanding area of agricultural land. It has been argued that Kautsky was proved wrong in this by history. Support for Kautsky’s contention can be found in Marx.

“The amount of ground-rent (and with it the value of land) grows with social development as a result of the total social labour. On the one hand this leads to an expansion of the market and of the demand for products of the soil, and on the other, it stimulates the demand for land itself, which is a prerequisite of competitive production in all lines of business activity, even those which are not agricultural. More exactly – if one considers only the actual agricultural rent – rent, and thereby the value of the land, develops with the market for the products of the soil, and thus with the increase in the non-agricultural population, with its need and demand for means of subsistence and raw materials. It is in the nature of capitalist production to continually reduce the agricultural population as compared with the non-agricultural, because in industry (in the strict sense) the increase of constant capital in relation to variable capital goes hand in hand with an absolute increase, though relative decrease, in variable capital; on the other hand, in agriculture the variable capital required for the exploitation of a certain plot of land decreases absolutely; it can thus only increase to the extent that new land is taken into cultivation, but this again requires as a prerequisite a still greater growth of the non-agricultural population.”

(Capital Vol III p637)

In other words Marx like Kautsky is saying that because of the increasing organic composition of capital in industry proper two forces will be at work. Firstly, part of the increasing amount of constant capital will be comprised of raw materials i.e. the quantity of raw material consumption will increase at a faster rate than population growth. Secondly, although variable capital will fall relative to constant capital, there will in fact be an absolute increase in the amount of variable capital employed i.e. more labour will be employed reflecting a growing industrial labour force. This absolute increase in the amount of industrial labour employed results in an increasing demand for food and raw materials. In short this leads to “an expansion of the market and of the demand for products of the soil, and on the other, it stimulates the demand for land itself, which is a prerequisite of competitive production in all lines of business activity, even those which are not agricultural.”

Kautsky’s position is, therefore, not unreasonable. He does not include other primary goods such as mining because it complicates the exposition, but at the time this was also reasonable. The biggest part of primary production was agricultural including industrial agricultural products like cotton. Coal, iron, steel etc. were still mostly demanded not for end consumption, but for capital goods, power, transport etc. It is only with mass production and consumerism that steel, rubber etc. became important commodities for end consumption i.e. factors which lead to the conclusion for the importance of agriculture (rising quantity of these products in (C) and (v) as circulating capital now apply to all basic resources.) This is true of oil for example for synthetics. Viewed in this light Kautsky’s position holds. The majority of this production comes from former colonial areas.

Engels also gives another reason why the demand for such land would lead to a drive towards expansion.

"When the English corn duties were abolished in 1846, the English manufacturers believed they had thereby turned the landowning aristocracy into paupers. Instead they became richer than ever…..Since no total displacement of the poorest soil took place, but rather, at worst, it became employed for other purposes – and mostly only temporarily – rents rose in proportion to the increased investment of capital, and the landed aristocracy consequently was better off than ever before…..But everything is transitory. Transoceanic steamships and the railways of North and South America and India enabled some very singular tracts of land to compete in European grain markets….. Fortunately, the plains are far from being entirely brought under cultivation; there are enough left to ruin all the big landlords of Europe and the small ones into the bargain.”

(Capital Vol.III pp725-6)

The argument that Germany did not take over French agriculture or colonies during WWII is not compelling from this perspective. But it does explain Germany’s interest in Alsace-Lorraine. Moreover, the French colonies left in the hands of the Vichy regime are an early example of neo-colonialism. Germany benefits from arrangements with a client/comprador regime without the costs of direct administration. Moreover, Germany had its sights set on Russia’s agricultural and mineral riches, as well as targeting the oilfields of South-Eastern Europe.

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