For bourgeois ideologues, history is said to be a ceaseless struggle between two antagonistic forces: development and underdevelopment. Thus, the forward march of human history would be reduced to economic progress and measured by means of a technological coefficient (tonnes of steel ‘per capita’) or an economic coefficient (gross national product ‘per capita’).

The theory of ‘economic development’ as a theory of history is not new; it is a version of the bourgeoisie’s age-old and ever-renewed claim according to which its social system is the only ‘natural system’, all social ills being due to its failure to flourish. Workers are told that the harder they work, the greater their share of social wealth will be (which, incidentally, is in stark contradiction to all the laws of capitalism), whilst to ‘backward’ peoples, the ravages of colonialist and imperialist penetration are presented as the ‘natural’ consequence of their ‘underdevelopment’.

Now, just as the petty bourgeoisie feels alternately crushed by big capital and inspired by the promise of gains that will lift it out of its petty-bourgeois condition, all political currents in ‘underdeveloped’ countries or the ‘third world’ claim to have the formula for development. This is true not only of reformist movements, but also, and above all, of movements that advocate armed struggle, violence. Most of these currents claim allegiance to Marxism and present it as the theory of economic development, of the development of the productive forces. This is the case with the three ‘Marxist’ political schools: that of the C.P.s linked to Moscow; that of the Castroists and pro-Chinese factions; and, finally, that of the group associated with Monthly Review, namely Baran, Sweezy and, more specifically for Latin America, A. G. Frank.

In this article, we shall focus on Baran’s theory of ‘underdevelopment’, as set out in the second part of his book: ‘The Political Economy of Growth’ ⁽¹⁾. If we take Baran’s theorisation as the target of our critique in order to restore the Marxist perspective on this issue, it is because it is a hodgepodge of the clichés propagated by ‘Marxist-leaning’ petty-bourgeois ideology on this subject, and, in particular, regarding the relations between imperialism and backward countries.

Before summarising the ‘Baranian’ theory, let us briefly review the Marxist doctrine of history, as opposed to that of the struggle between ‘development’ and ‘underdevelopment’.

In Anti-Dühring, Engels writes: ‘Then it was seen that all past history, with the exception of its primitive stages, was the history of class struggles; that these warring classes of society are always the products of the modes of production and of exchange – in a word, of the economic conditions of their time’.

If history has therefore been nothing but a continuous clash between antagonistic social forces representing different economic, political, and social interests, this clash is merely a reflection of the different modes of production that these social forces were seeking either to preserve or to destroy ⁽²⁾.

History has been nothing but a ceaseless succession of modes of production which, starting with primitive communism, have passed through stages that are more or less intertwined, but which, for the sake of simplicity, we can classify as follows, at least in Europe: slavery, feudalism, capitalism.

Marxism sees in the succession of modes of production the material basis of human history. For it, history moves forward when the conditions ripen for the change toward a higher mode of production, when steps are taken towards the last, classless one: communism.

The succession of modes of production is accompanied by an increase in the social productivity of labour, or, if you will, in the use-values produced per unit of time and per producer. The emergence of a class-divided society and the dissolution of primitive communism already presuppose this increase. With capitalism, productivity increases exponentially, finding its only limit in the capitalist relations of production themselves (limits which manifest themselves in crises, wars... or in proletarian revolutions): this is what ‘development’ is for bourgeois science. But it is a consequence of the capitalist relation of production.

The antagonism between capitalism and communism does not lie on the terrain of labour productivity (although it is true that the latter will flourish greatly under socialism), but rather in the realm of social relations.

To extol economic growth for its own sake therefore amounts to siding, either openly or surreptitiously, with bourgeois ideology and, consequently, with social conservatism.

In the last century, Marx stated that ‘[t]he country that is more developed industrially only shows, to the less developed, the image of its own future’ (Capital, Book 1).

Baran, referring explicitly to this quotation, claims ‘[t]hat in reality things have not developed in this way (...) by no means a matter of fortuitous accident’ (pg. 140-1). Thus, ‘classical’ Marxism would appear to be contradicted by the facts, as ‘forward movement there has been either slow or altogether absent’ (pg. 136) in backward areas, and the proof of this is said to lie in the low social productivity of labour in the areas in question.

According to Baran, the reason for this alleged lack of development of the productive forces is as follows: the impossibility of transforming surplus labour (even in its modern form as surplus value) into capital; that is to say, the impossibility of the development of capitalism, because surplus labour, surplus value, and capital are in the hands of social classes and forces that have no interest in either agricultural or industrial investment: landowners, commercial and usurer’s capital, imperialism, and States. Therefore, ‘in the era of imperialism’, the capitalist economic development of backward countries is impossible. Let us hear from Baran:

‘Thus the economic surplus that is squeezed out of the peasant sector of agriculture is appropriated by the landowners, the moneylenders, and the merchants, and, to a smaller extent, by the state (...) It is obvious that the use made of this significant share (agricultural income, Ed.) of the national product is of crucial importance for the economic development of the underdeveloped countries. And it is no less obvious that in all underdeveloped countries the bulk of it is not used to expand and to improve their productive plant and facilities. A considerable share of the economic surplus accruing to the landowning class is absorbed by its excess consumption (...) the expensiveness of (...) agricultural machinery and the cheapness of agricultural labor militate against investment in plantation enterprise. (...) The situation is even worse if the land is in the hands of small tenants’ (pg. 165-6).

According to Baran, the growth of the productive forces is therefore ‘impossible’ in the agriculture of backward areas.

As for industry, either it cannot emerge at all, or it is confined to marginal sectors controlled by imperialism: in either case, ‘national’ accumulation accompanied by the development of national productive forces does not exist:

‘Whatever market for manufactured goods emerged in the colonial and dependent countries did not become the “internal market” of these countries. Thrown wide open by colonization and by unequal treaties, it became an appendage of the “internal market” of Western capitalism’ (pg. 174).

And when imperialism exports capital to these countries and invests it in industry, according to Baran, the bulk of it always goes to the extractive industry, which does not create an internal market, whilst the processing industry yields greater returns for the imperialist countries than for the ‘underdeveloped’ countries ⁽³⁾:

‘Thus (...) the underdeveloped world as a whole has continually shipped a large part of its economic surplus to more advanced countries on account of interest and dividends’ (pg. 184).

From all this, Baran draws the following conclusion: ‘And this points to the main task of imperialism in our time: to prevent, or, if that is impossible, to slow down and to control the economic development of underdeveloped countries’ (pg. 197).

As for the State, alas!, because it fails to mobilise the ‘economic surplus in order to use it to increase the means of production’, it constitutes the final obstacle to the development of the productive forces.

So there we have it: an ‘explanation’ of the inability to develop the productive forces of the ‘third world’ under a capitalist system, and especially in the ‘era of imperialism’. His conclusion is immediate: ‘The establishment of a socialist planned economy is an essential, indeed indispensable, condition (our emphasis, Ed.) for the attainment of economic and social progress in underdeveloped countries’ (pg. 261).

Note the doctrinal ‘consistency’ in Baran: in the era of imperialism, capitalist development in backward countries stagnates and is virtually non-existent; it cannot be otherwise. Therefore, in order to develop the productive forces, socialism is necessarily required.

First corollary: Russia, China, Cuba, etc., are socialist because they have succeeded in developing their productive forces starting from a backward economic stage.

Second corollary (which is not explicitly stated in this work, but which is characteristic of this entire political school and its Stalinist ‘cousin’): since, for Marxism, the destruction of obstacles to the modern development of the productive forces is a historical and popular necessity, and since this development can only be realised through the socialist revolution, the latter has been and can still be the work of the whole people, the work of class alliances.

Third corollary: Since any revolution entails the liberation of the productive forces, the only revolution possible ‘in the era of imperialism’ is the socialist revolution ⁽⁴⁾.

Thus, according to this ‘extremist’ and ‘radical’ theory, the socialist revolution may be the product not of the development of the antagonisms inherent in the capitalist mode of production, antagonisms which grow alongside it, but of the underdevelopment of the productive forces.

Baran’s theory represents a revisionism of Marxism on three levels: economic, political, and historical.

Economic revisionism, because Baran claims that ‘classical’ Marxism must be ‘enriched’ to account for global developments ‘in the era of imperialism’, on the grounds that history did not follow the expected course, in short, because the Marxist critique of political economy is valid for the 19th century, but not for the 20th (a position common to all forms of revisionism since Bernstein).

Political revisionism, because the socialist revolution might not be the historical and political conquest of the proletariat alone, but a conquest common to several social classes (a position that even Kautsky never dared to assert and which is shared by Stalinism).

Historical revisionism, because, like all revisionism, it presents the socialist revolution as the heir to the bourgeois revolution: it could be led by the same social forces and have the same economic tasks ⁽⁵⁾.

And they would have us believe this is Marxism! In reality, Baran’s theory is nothing more than an attempt to provide a ‘new’ economic justification for the supposed socialist nature of the ‘Eastern Bloc’, China, etc., and for the political theories associated with them. Inheriting from Stalinism the view of socialism as the ‘record-breaker’ in terms of productive growth (and the title of his book is already very telling), he attempts to patch up the Stalinist theory which the material facts tend to shatter to smithereens.

Baran’s theory is far from being without political implications. Quite the contrary, these implications are in open contradiction and opposition to revolutionary Marxism and communism, as set out from the Manifesto onward and restored by Lenin’s Third International.

Since the key to Baran’s entire doctrine is his so-called Marxist and materialist economic analysis, we shall take it up again, demolishing its ‘postulates’ in order to invalidate its conclusions. The struggle against economic revisionism is inseparable from the struggle against revisionism as such!

To demolish Baran’s economic theory, one need only demonstrate that capitalist development – that sorcerer’s apprentice of modern productive forces – is not impossible in backward regions, and that, on the contrary, the material development of these areas is proceeding in the direction predicted by Marxism in the last century.

In this regard, our critique will consist of showing that the six factors which, according to Baran, render the capitalist development of the productive forces in backward areas impossible actually play entirely different historical roles. We shall demonstrate:

1. that usurer’s and commercial capital constitute a factor whose operation creates the preconditions for the penetration of the capitalist mode of production;


2. that the mere expansion of the wage-earning workforce, even without a significant increase in the social productivity of labour, far from indicating the existence of a ‘parasitic’ capitalism, constitutes the basis for the flourishing of the capitalist mode of production;


3. that the action of colonialism is drawing these regions into the maelstrom that is propelling them towards modern social development;


4. that one cannot in any way speak of a single role played by imperialism in relation to the ‘Third World’ in general, since the influence of imperialism on the productive forces of backward regions depends fundamentally on the level of social development attained by those regions;


5. that nothing can be explained by the autonomous will of States, and that the roles of the latter must be understood in relation to the ruling classes, which are in turn expressions of the given modes of production and their historical development; and finally:


6. that a simple historical observation highlights the confirmation of the Marxist prediction regarding social and economic developments in the extra-Euro-American regions.

With a view to examining the penetration of capitalism into backward regions, we shall take up the problems raised by Baran and, without seeking new interpretations for the 20th century, return to our classics:

Baran argues that usury acts as an obstacle to capitalist development, since the ‘economic surplus’ is diverted away from the producer and prevents them from accumulating capital. In doing so, he seriously confuses the historical periods in which usury operates.

In Marxism, ‘[i]nterest-bearing capital, or, as we may call it in its antiquated form, usurer’s capital, belongs together with its twin brother, merchant’s capital, to the antediluvian forms of capital, which long precede the capitalist mode of production and are to be found in the most diverse economic formations of society’ (Capital, Book 3).

A little further on, Marx describes the forms of existence of usurer’s capital in backward societies: ‘The characteristic forms, however, in which usurer’s capital exists in periods antedating capitalist production are of two kinds. I purposely say characteristic forms (...) These two forms are: first, usury by lending money to extravagant members of the upper classes, particularly landowners; secondly, usury by lending money to small producers who possess their own conditions of labour – this includes the artisan, but mainly the peasant, since particularly under pre-capitalist conditions, in so far as they permit of small independent individual producers, the peasant class necessarily constitutes the overwhelming majority of them’ (Capital, Book 3).

And that is how usury becomes a powerful means of making possible the conditions that will pave the way for capitalism:

‘... the usurer, not content with squeezing the surplus-labour out of his victim, gradually acquires possession even of his very conditions of labour, land, house, etc., and is continually engaged in thus expropriating him (...) this (...) is the established condition for its (the capitalist mode of production’s, Ed.) point of departure’ (Capital, Book 3).

‘Usury is a powerful lever in developing the preconditions for industrial capital in so far as it plays the following double role, first, building up, in general, an independent money wealth alongside that of the merchant, and, secondly, appropriating the conditions of labour, that is, ruining the owners of the old conditions of labour’ (Capital, Book 3).

This, then, summarises the revolutionary role of usurer’s capital: accumulation of masses of money on the one hand; dissolution and destruction of the forms of property ‘on whose solid foundation (...) the political organisation is based’ on the other.

It is a factor which, despite itself, makes capitalism possible. And we say ‘despite itself’ because usury also plays a reactionary role: whilst destroying forms of property, it tends to preserve the mode of production:

‘Usury, like commerce, exploits a given mode of production. It does not create it, but is related to it outwardly. Usury tries to maintain it directly, so as to exploit it ever anew; it is conservative and makes this mode of production only more pitiable (...) this usurer’s capital impoverishes the mode of production, paralyses the productive forces instead of developing them, and at the same time perpetuates the miserable conditions in which the social productivity of labour is not developed at the expense of labour itself, as in the capitalist mode of production...’ (Capital, Book 3).

When Baran asserts that usurer’s capital makes the development of capitalism impossible, he is not uncovering anything unique to the 20th century, but neither does he understand anything about dialectics: he sees only the braking role of usury. But usury can only act as a brake after it has first served as a lever to create the conditions for capitalism, and not before.

In the ‘Baranian’ theory, commercial capital – in backward countries – helps to make capitalist development impossible by hindering the accumulation of money in the hands of peasants ⁽⁶⁾.

Before moving on to an analysis of the role of commercial capital in the emergence of the capitalist mode of production, we must make a general observation concerning the issue of the peasantry and small producers. Baran supposes that the misery and non-accumulation of money in the hands of the peasantry ‘in general’ prevent the development of the productive forces, thereby implying that capitalist accumulation could have taken place without the expropriation of the working masses. He is gravely mistaken.

The development of any capitalism can only take place, as Capital has amply demonstrated (see also our Party’s works Elements of Marxist Economics and Property and Capital), on the basis of the ‘general’ expropriation of producers, artisans, and peasants, on their absolute social misery, on the ‘total nakedness’ of the vast masses, a phenomenon whose counterpart is the appropriation of social wealth by a minority. Where this expropriation has been slowed down (see the USSR, with the concessions to peasants that followed forced ‘collectivisation’), capitalism marks time in aberrant and retrograde forms, slowing its evolution.

That said, let us return to merchant capital. On this question too, Marxism, far from freezing historical phenomena into ‘static’ images, highlights the dialectical interplay of factors that converge in historical processes.

‘[The existence of merchant’s capital] requires no other conditions (...) outside those necessary for the simple circulation of commodities and money (...) No matter what the basis on which products are produced, which are thrown into circulation as commodities – whether the basis of the primitive community, of slave production, of small peasant and petty bourgeois, or the capitalist basis, the character of products as commodities is not altered...’ (Capital, Book 3).

Merchant capital, in relation to pre-capitalist structures, is characterised by theft and fraud ⁽⁷⁾. And where merchant capital plays a preponderant role in relation to total capital, it is because capitalism – as a mode of production – is embryonic or virtually non-existent ⁽⁸⁾.

Despite this, merchant capital creates two historical conditions which – combined with other factors, and not on their own – make the development of the capitalist mode of production possible:

‘There is, therefore, not the least difficulty in understanding why merchant’s capital appears as the historical form of capital long before capital established its own domination over production. Its existence and development to a certain level are in themselves historical premises for the development of capitalist production 1) as premises for the concentration of money wealth, and 2) because the capitalist mode of production presupposes production for trade, selling on a large scale, and not to the individual customer, hence also a merchant who does not buy to satisfy his personal wants but concentrates the purchases of many buyers in his one purchase. On the other hand, all development of merchant’s capital tends to give production more and more the character of production for exchange-value and to turn products more and more into commodities (...) Of course, commerce will have more or less of a counter-effect on the communities between which it is carried on. It will subordinate production more and more to exchange-value by making luxuries and subsistence more dependent on sale than on the immediate use of the products. Thereby it dissolves the old relationships [...and] encompasses no longer merely the surplus of production, but bites deeper and deeper into the latter, and makes entire branches of production dependent upon it’ (idem.).

And when the general historical conditions are ripe for the emergence of capitalism in production, merchant’s capital gives it a powerful impetus ⁽⁹⁾.

The reader will forgive us for this recapitulation, which includes lengthy quotations; yet these are necessary to understand the role played by Western capitalism vis-à-vis the backward regions – a role clearly highlighted by Marxism from its inception. This does not prevent so-called ‘academic Marxists’ and hordes of ‘correctors’ from claiming to consign Marxism to the dustbin of history, believing they can assert that 19th-century Marxism is different from 20th-century Marxism.

We have just discussed two factors whose combined effect clears the way for the capitalist mode of production. We shall now turn to the two fundamental phases of the economic development of capitalist production, which are directly linked to the question of the capitalist development of the productive forces.

For Marxism, one of the conditions of the capitalist mode of production is the existence of the free worker ⁽¹⁰⁾. Now, this requires that every other mode of production which ‘bound’ the worker be dissolved: slavery, serfdom, Asiatic despotism, primitive communism, patriarchal production and all their historical variants that have existed or still exist:

‘When the peasant who previously produced independently for himself becomes a day labourer working for a farmer; when the hierarchical structure valid for the mode of production of the guild type disappears, to be replaced by the simple antithesis between the capitalist and the handicraftsman who is set to work for him as a wage labourer; when the man who was previously a slaveholder employs his former slaves as wage labourers, etc., production processes with a different social determination are thereby converted into the production process of capital’ (Unpublished 6th Chapter of Capital).

This separation of the producers from the means of production and the daily sale of labour power to capital in no way signify an upheaval in the technical conditions of production, which are what determine the social productivity of labour:

‘It is in order to mark the contrast with the latter mode of the labour process that we call the subsumption of the labour process under capital examined so far – which is the subsumption under capital of a mode of labour already developed before the emergence of the capital-relation – the formal subsumption of labour under capital (...because) [a]s yet there is no difference in the mode of production itself. The labour process, seen from the technological point of view, continues exactly as it did before, except that now it is a labour process subordinated to capital (...) If the relation of domination and subordination replaces those of slavery, serfdom, vassalage, patriarchal, etc., relations of subordination, there takes place only a change in their form...’ (ibid.).

Although the formal subsumption of labour under capital does not automatically entail a revolution in production techniques, it forms the basis upon which the real subsumption of labour under capital will develop.

‘With the real subsumption of labour under capital there takes place a complete [and a constant, continuous, and repeated, cf. Communist Manifesto] revolution in the mode of production itself, in the productivity of labour and in the relation between capitalist and worker.

‘In the case of the real subsumption of labour under capital, all the changes in the labour process itself, analysed by us previously, actually take effect. Labour’s social powers of production are developed, and with labour on a large scale the application of science and machinery to direct production takes place. On the one hand, the capitalist mode of production, which now takes shape as a mode of production sui generis; changes the shape of material production. On the other hand, this alteration of production’s material shape forms the basis for the development of the capital-relation, which in its adequate shape therefore corresponds to a specific level of development of the productive powers of labour’ (ibid.).

Both formal subsumption and real subsumption represent two phases of the same historical development of capitalism: they are not two different capitalisms, but two stages of the same process, just as there can be no butterfly without a chrysalis:

‘What is generally characteristic of formal subsumption remains valid in this case too, i.e. the direct subordination to capital of the labour process, in whatever way the latter may be conducted technologically. But on this basis there arises a mode of production – the capitalist mode of production – which is specific technologically and in other ways, and transforms the real nature of the labour process and its real conditions. Only when this enters the picture does the real subsumption of labour under capital take place’ ⁽¹¹⁾.

To examine, therefore, the issue of increased labour productivity brought about by capitalist development is to examine the transition to the real subsumption of labour under capital.

It is worth noting in passing that what bourgeois economists refer to as ‘economic take-off’ is nothing other than the emergence – accompanied by real subsumption – of the ‘specifically’ capitalist mode of production, with the full flowering of its fundamental laws, including production for production’s sake, that is to say, the supremacy of the means of production sector over the means of consumption sector.

Generally speaking, the study of the growth of the productive forces in backward regions or the ‘Third World’ (a notion which, let it be said once and for all, is as theoretically impotent and empty of all content as that of ‘underdevelopment’) amounts to analysing the problem – a rich and illuminating one – of the evolution of modes of production.

This is why there can be no general theoretical branch within the critique of political economy that deals with ‘underdevelopment’ in relation to fully developed capitalism. It can only be a question of historical transitions, based on existing pre-capitalist modes of production, towards the subsumption – first formal, then real – of labour under capital.

In fact, Baran implies that capitalism has already penetrated the whole of Latin America, Asia, and Africa – the ‘Third World’:

‘They violently jolted their entire development (...) They burst with explosive force into the glacial movement of their ancient societies and tremendously accelerated the process of decomposition of their PRE-CAPITALIST STRUCTURES’ (emphasis added by us, Ed.) (pg. 143).

Marxism, for its part, has never claimed this. With the Manifesto, it can be argued that global capitalism has torn these regions out of isolation and autarky, integrating them into the world market by attempting to forcefully impose mercantilism. Mercantilism, however, is a condition of capitalist development which, through the force of global capitalism, sets in motion the historical process of the peoples’ march towards capitalism. The distance travelled along this path can only be assessed through a piece of historical – both economic and social – work, which is entirely absent from Baran’s œuvre.

Here, we do not claim to deal with the development of Latin America, Asia, and Africa following the upheaval brought about by Western ‘civilisation’. This development must be brought to light through the work of the party. In this article, we do no more than set, on Marxist terrain, the theoretical issues raised by our opponents.

The superiority of Marxism over all bourgeois social doctrines lies, let us repeat, in the fact that it views history as a succession of modes of production.

The historical blindness of all ‘accountants’ of history, in the Baran mould, is laid bare in the question of capitalist transformation in agriculture.

Thus Baran goes to war against the plantations and large estates which, whilst employing wage labour, squander the ‘economic surplus’ on superfluous expenditure ⁽¹²⁾.

Marxism, for its part, asserts that capitalism tends to develop first in agriculture, but that it is in agriculture that technological transformation is the last to be completed. In other words, although capitalism first emerges in agriculture, real subsumption penetrates it last. This is due, amongst other things, to the fact that the transformation of technical conditions – which, in turn, determine labour productivity – already presupposes a significant increase in productivity within industry.

But the capitalist transformation of agriculture, whether in the form of the large capitalist farm or, more generally, the emergence of wage labour, has an influence that goes far beyond the simple ratio of variable capital/constant capital, the measure of social productivity.

This transformation constitutes the basis for the expansion of the internal market for manufacture or industry. The circulation of money expands, and it expands mercantilism and the markets.

By developing the domestic market – after all, workers must be able to find on the market what they previously produced as small independent producers – one accelerates the transition from the formal phase to the real phase of the subsumption of labour under capital, to the supremacy of industrial capital over usurer’s and merchant capital; in short, to the formation of bourgeois society.

Let us take the history of Brazil ⁽¹³⁾ as an example. There one observes two kinds of plantation: that of sugar cane and that of coffee. The first corresponds to a slaveholding system in a country that was merely an a-national trading colony. This situation continues for three centuries. The appearance, around the mid-19th century, of coffee plantations coincides with the expansion and supremacy of wage labour, and the rise of a landed and commercial bourgeois class that differs from its predecessor, just as the 19th-century French bourgeois nobility differed from the feudal nobility of the 18th, and which constitutes a major step forward in the formation of modern society and the establishment – along with its political supremacy – of a form of nation-State.

Let us summarise the conclusions drawn from what has been discussed so far. What Baran denounces as ‘obstacles’ to capitalist development are, in fact, nothing but the general historical conditions of that very development: usurer’s capital, which destroys the old structures of property at the same time as it realises the accumulation of money-capital, just as commercial capital tends, moreover, to expand mercantilism; the formal subsumption of labour under capital, which broadens and deepens the formation of an internal market and constitutes the basis of the ‘specific’ capitalist mode of production.

Since we are right in the thick of the subject, let us say that the unimaginable misery of the masses in the ‘Third World’ expresses nothing other than the supremacy of usurer’s and commercial capital and the dawn of the capitalist mode of production. One finds there, on the one hand, the misery inherent in the extortion of surplus value by capital on the basis of archaic modes of production and production techniques, and on the other, the expropriation of the producers. This is, moreover, an ‘idyllic’ path, similar to that already travelled by Europe, which leads towards capitalism.

Like causes produce like effects. Baran’s supposedly new critique of usurer’s, merchant and landed capital is in fact merely a repetition (and a most poor one at that!) of the critique put forward by the ideologues of the rising manufacturing bourgeoisie in Europe; a critique which served as a weapon of struggle of the new strata of the bourgeoisie, representing advanced capitalism, against those who were the products of backward forms of capital. Baran himself is forced to acknowledge this ⁽¹⁴⁾.

As for us, we regard it as a doctrinal victory that ‘classical’ Marxism is valid not only for English or even European capitalism within the confines of the 19th century, but for all geographical areas and all historical periods.

This is what enables us to draw on the political lessons of the 19th-century class struggle in Europe – just as the Bolsheviks did – so that, unchanged, they may arm the revolutionary forces of the proletariat in non-white regions in the international struggle against global capitalism.

Petty-bourgeois stupidity reaches the peak of its perfection when it addresses the subject of colonialism and imperialism and their relationship with backward regions.

Colonialism and imperialism are blamed for having prevented the ‘harmonious development’ of these countries: ‘At the same time it should not be overlooked that India, if left to herself, might have found in the course of time a shorter and surely less tortuous road toward a better and richer society. That on that road she would have had to pass through the purgatory of a bourgeois revolution, that a long phase of capitalist development would have been the inevitable price that she would have had to pay for progress, can hardly be doubted. It would have been, however, an entirely different India (and an entirely different world), had she been allowed – as some more fortunate countries were – to realize her destiny in her own way, to employ her resources for her own benefit, and to harness her energies and abilities for the advancement of her own people’ (pg. 150). And further on: ‘For it is by no means to be taken for granted that the now underdeveloped countries, given an independent development, would not at some point have initiated the utilization of their natural resources on their own and on terms more advantageous than those received from foreign investors’ (pg. 186).

Petty-bourgeois ideologues merely exaggerate to the point of ridicule the characteristics of the class they represent: caught between big capital and the class of the reserveless, always outstripped by events beyond its control, tossed about by material forces that can only lead to its own ruin, the petty bourgeoisie dreams. Its philosophy is that of ‘if only...’: ‘if only we could have...’, ‘if only capitalism could have existed without imperialism...’, and so on.

You see, if ‘evil’ imperialism had not existed, Indian bourgeois development might have taken place ‘at a lower cost’; that would have been the ‘price that she would have had to pay for progress’; it might have been able to ‘harness her energies and abilities for the advancement of her own people’. The eternal refrain of all bourgeois ideologues! This ‘forgets’ that the capitalism of the ‘pre-imperialist’ era, that of Europe from the 16th century onwards, established itself by fire and sword, and that three centuries later the proletariat was only just beginning to organise itself so as no longer to be the defenceless prey of unbridled capitalist plunder. Marxism has never denied – neither in theory nor in practice – the revolutionary nature of the bourgeois transformation of pre-capitalist structures, but it has always called it by its name, denouncing its content in advance, positioning itself not on the ground of ‘productivity’, but on that of antagonisms; not on that of the ‘advancement of the people’, but on that of the class struggle.

But let us return to the role of white colonialism. As early as 1848, Marxism clearly highlights the relations between backward regions and the European bourgeoisie. On the one hand, the emergence of capitalism in Europe is indissolubly bound to the recent history of peoples in extra-European regions: the wage slavery of the proletarians had as its precondition the outright slavery of the coloured races in Latin America, Asia, and Africa. On the other hand, ‘[t]he bourgeoisie (...) draws all, even the most barbarian, nations into civilisation’ ⁽¹⁵⁾. Let us see how.

The development of capitalism in Europe coincides, in Russia, with the emergence of feudalism, constituted upon the agrarian community (mir). In this clash between two different modes of production, revolutionary capitalism never succeeded in overthrowing reactionary feudalism. But this clash compelled the Russian state to engage in war production to defend its social system, the abolition of serfdom in order to free up the necessary labour force, the extortion of taxes to provide itself with financial means. Thus, tsarism was forced to undermine its own social bases and was drawn into modern history. The same holds true for Japan.

As for Asia, it had been living for millennia under Asiatic despotism, periodically shaken by peasant revolts which counteracted the system’s decline, thereby starting the whole cycle again. Behind this social dynamic there lay hidden an ancestral stagnation.

The arrival of the Europeans with their gunboat diplomacy shattered this ever-renewed cycle. Thus, for example, the invasion of China by Western manufactured goods ruined local craft production and the guild system; forced loans led to higher taxes, which accelerated and exacerbated the corrosive effect of usury; the introduction of opium exacerbated the mercantilism that had long existed in Asian society without managing to destroy it; the ruin of Asiatic property led to the decline of political structures. The steamroller of modern history had been set in motion.

As for Africa and Latin America, there one found only societies that did not pass beyond the stage of barbarism. And it is colonisation that tended, and tends, to destroy these social forms.

To speak of an endogenous development of all these societies towards capitalism would be as absurd as to speak of the ‘rising fall of a stone’...

If one strips Baran’s assertions of all the phraseology typical of vulgar political economy, one is left with only this fundamental assertion: the transition to the real subsumption of labour under capital is impossible in extra-European regions, once capitalism has fully established itself in Europe.

We shall not deal with particular cases here, but, following the mathematical method, we shall demonstrate the falsity of such a thesis by providing historical examples that refute it. If this assertion is generalisable to all periods of European capitalism (as, for example, A.G. Frank claims), one need only cite the example of the USA (first a colony, then an English semi-colony) to refute it as regards the pre-imperialist period. If, on the other hand, one wishes to assert that it is ‘in the era of imperialism’ that such a transition is impossible, one need only cite the examples of Japan in Asia and Mexico or Argentina in Latin America to refute this claim. And we have cited only those countries openly recognised as capitalist; there are also those which, whilst claiming to be ‘socialist’, are in fact nothing but bourgeois nations: the USSR and the countries of Central Europe. And we shall not mention China because it is simply in the process of laying the bases for capitalist development ⁽¹⁶⁾.

Let us now turn to an analysis of imperialism, and we shall show that the arguments put forward by Baran regarding its role and nature (arguments enjoying a wide audience today, particularly in backward regions) make him the proponent of a variant of Kautsky’s theory of ultra-imperialism.

‘Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed’ (Lenin: Imperialism, the Highest Stage of Capitalism).

At this monopolistic stage of the capitalist mode of production, the concentration of money-capital within financial monopolies (the banks), which exert a strong hold over social capital (industrial and commercial), is extremely advanced.

Whilst capitalism in the ‘competitive’ period was characterised by the export of commodities (leading to the commercial wars), capitalism at the imperialist stage is characterised by the export of capital, because the accumulation of money-capital in a small number of States is such that one can say that ‘imperialism is an immense accumulation of money capital in a few countries’ (Lenin). And this results in wars for the division and redivision of spheres of influence (investment regions) – imperialist wars.

However, money-capital, as capital, exists solely to yield interest. This is the defining characteristic of all money-capital, in any mode of production, be it slaveholding, feudal, Asiatic, patriarchal, or capitalist. It does not create the mode of production; it presupposes its existence.

Money-capital is an ‘antediluvian’ form of capital, but it is under capitalism, within the capitalist mode of production, that money-capital blossoms and subjects the whole of society to itself. The reason for this is that money-capital presupposes the existence of mercantilism, and it is under capitalism that mercantilism reaches its full development.

Money-capital can play its part in any suitable mode of production. Thus, it is invested in other capitalist countries as industrial, commercial, or bank capital; it practises usury in Tsarist Russia or in Asian countries, in the manner of the lowliest of local satraps; it is invested in the commerce of backward countries (engaging in plunder and swindling on both a small and large scale); it invests in manufacturing in line with the needs of the markets of the ‘Third World’ or, indeed, to meet the global market’s demand for raw materials; it even goes so far as to finance the introduction of slavery in tropical regions. And so on.

Imperialism is not an economic category: it is the supremacy of money-capital on a world scale, tending to subjugate all international productive forces to itself, whether capitalist or not. And this supremacy is only possible because, having reached its ‘highest’ stage, capitalism has developed to an extreme degree in a small number of countries.

People à la Baran want to identify specific differences between the influence of ‘pre-imperialist’ and ‘imperialist’ capital on backward areas. They are completely turning the issue on its head. If there is any difference at all, it is not due to the capital, but to the socio-economic development of these regions.

Let us look at Asia. It was pre-imperialist colonialism that ‘opened up’ the continent to the world market, exacerbating the corrosive effects proper to the usurer’s and merchant capital that had long existed within this society. Imperialism merely inherited this usurious and commercial role, and developed a weak industry insofar as the narrow internal market, born of the disintegration of the old society, was also expanding. The difference between the pre-imperialist period and the present one depends on the internal transformations of Asian society.

In Latin America, slavery and forced labour appear in the phase of commercial capitalism in 16th-century Europe. Taking various forms and evolving according to the international conjuncture, they maintain these societies in hybrid social forms. European capital is invested in trade and State loans (usury).

The development of the world market in the wake of the ‘Industrial Revolution’ definitively integrates these countries into international trade flows and develops a powerful commercial bourgeoisie. The decline of slavery, the formation of the first bourgeois forms of production – in short, the beginning of the formation of bourgeois society towards the end of the last century – alongside the formation of an internal market, paved the way for the first capital investments in industry. In short, it is ‘during the imperialist era’ that a fully bourgeois Latin America is born.

As for Africa, it is the best example of the fact that the form of surplus value extortion can depend only on the historical stage of society. If we set aside the period when it supplied only slaves for export to the Americas, we can see that capital only truly colonised Africa from the imperialist period onwards.

It speaks volumes that imperialism was unable to introduce into Black Africa any methods of exploitation other than those used by the ‘Spanish savages’ during the conquest of Latin America, four centuries earlier, namely forced labour, with the extraction of a very small surplus-product, or else taxes in kind.

The distinction they draw between colonialism, neo-colonialism, and imperialism, in terms of the influence of the metropolises on backward regions, therefore merely reveals the stupidity of the ideologues of ‘development’.

The considerations set out above also enable us to highlight the fact that imperialism cannot be defined as a policy of finance capital, as Lenin has already shown.

And once again, the role played by American imperialism in Brazil is highly instructive. Despair and bewilderment for the fervent Stalinist advocate of ‘record industrialisation’! It is indeed imperialism that not only provides support and impetus for the country’s industrial and heavy development, but also aids in the attempt to liquidate backward capitalist structures. That this attempt is carried out through the terror and ferocious repression of the State adds nothing new to the history of capitalism: capital has never imposed its domination or survived in any other way.

The correct Marxist view, both of the nature of imperialism as the highest stage of capitalist development and of its relationship with backward regions, provides the basis for the correct communist and internationalist position on the relationship between the global anti-capitalist struggle and that of the backward peoples.

Imperialism, being a product of ultra-developed capitalism, can only die along with it, with the fall of the strongholds of this decaying capitalism. When the colonial or semi-colonial peoples in backward regions clash, arms in hand and directly or indirectly, with the interests of imperialist finance capital and its representatives, they are fighting against the influence exerted by money-capital on their respective social structures: principally commercial and usurer’s capital in Asia; forced labour first and then taxation in Black Africa, etc.

To transform the struggle against certain forms of capital into a struggle against the very roots of capitalism: to carry a national-revolutionary movement beyond its own limits into an international proletarian movement, such is the task of the world proletariat, and of it alone! This is why the struggles – at their various historical stages – of the backward peoples of Asia, Africa and even the most backward regions of Latin America against the imperialist States can only become links in the direct struggle against the very roots of imperialism if they are integrated by the world proletariat into its anti-capitalist struggle.

Let us take a closer look at the two arguments put forward by Baran in support of his thesis on imperialism’s ‘ill will’ vis-à-vis the industrialisation of the ‘third world’:

1. investment is channelled mainly into industries that have no direct influence on social development (or, rather, on productivity) in these countries (mining, plantations, etc.).


2. the export of profits to the metropolises does not allow for the full (?) utilisation of the ‘potential economic surplus’ (sic).

To return to the first point, Marxism asserts that the objective, the aim of capital, is surplus value and not the commodity; exchange value and not use value. Capital is invested wherever it can yield profits. If, in certain countries, imperialism invests only in mining, it is because, in other sectors, it cannot expect ‘better’ profits.

Capital has no national or sectoral prejudices: it flows to wherever it finds favourable material conditions for its investment. This is why capital is mainly exported to highly developed capitalist countries, to imperialist countries. This development is not the consequence of these investments, but rather the reverse: it is because there is a large domestic market in developed capitalist countries that capital flows there. Similarly, ‘underdevelopment’ is not the result of a low percentage of investment by imperialism. The opposite is true.

As for the second argument, that concerning the repatriation of profits, we might respond, in a polemical way, that we do not care about it, provided that a proletariat – even if numerically weak – can be formed and, united with the world proletariat, can carry the anti-imperialist revolts of the backward regions beyond their own limits, so that they may contribute to the destruction of a world where ‘economic surplus’ is the sole and supreme aim of all human activity.

To address the argument on a theoretical level, it suffices to add that the export of profits stems from the narrowness of these countries’ domestic markets; that is all there is to it. Since the rate of profit is precisely at its highest in backward areas, capital would have to be masochistic to flee from places where profits are highest, were there not a powerful economic reason for doing so.

For Baran, on the other hand, points (a) and (b) are said to be manifestations of a malign will inherent in imperialism to prevent any capitalisation or industrialisation of backward areas. This view is a variant of Kautsky’s theory of imperialism. Thus, imperialism would be a policy.

This view is not only false theoretically, but in glaring contradiction to the facts ⁽¹⁷⁾. Examples: India or Brazil, to name but two countries. It is internal conditions (prior creation of a domestic market) and external conditions (need for capital investment in the metropolises and inter-imperialist competition) that led to the powerful establishment of modern large-scale industry.

In conclusion: as regards the influence of capital on modes of production in backward regions, imperialism, as a phase of global capitalism, brings nothing new to the table – nothing that had not already been highlighted by Marxism over a century ago.

We would like to take this opportunity to draw attention to a final argument put forward by the entire Baran political school, which seeks to demonstrate the impossibility of the much-vaunted capitalist development, namely the widening gap that separates the countries of the Euro-American area from the rest of the continents in terms of accumulated wealth.

This phenomenon is merely an expression of a general law of capitalism: the tendency towards the concentration and centralisation of capital. We see in this the confirmation of the Marxist analysis of capital, and when Marxists raise this argument, it is to demolish the imperialist pretensions of the capitalist regime to ensure equality amongst nations under its rule, the eternal dream of petty-bourgeois democracy. As the Communist International stated in 1920, ‘[t]he real meaning of the demand for equality (between nations, Ed.) consists in its being a demand for the abolition of classes’. But this argument has nothing to do with our subject: from a Marxist perspective, this gap can widen, and must widen, whilst allowing for the transformation of modes of production towards capitalism, because this gap is intrinsic to capitalism.

The revolutionary proletariat cannot concern itself with the ‘widening gap’ between nations – which so greatly agitates all petty-bourgeois nationalists – because the wealth of all the States and nations of the world consists of the surplus value extorted from the proletariat. If it were to concern itself with this, it would fall straight into class collaboration.

Let us reiterate: the communist proletariat is concerned with the problem of modes of production, not with differences in the balances of the bank accounts of the exploiting masters.

It is always when they address the question of the State that political theories reveal their true nature. Baran’s theory is no exception to this rule, for on this question he abandons his last ‘Marxising’ pretensions.

Indeed, if the key of history is the struggle for the increase in the social productivity of labour, and if this productivity increases in line with investment of the ‘economic surplus’, one can classify States into three categories: those that invest nothing, those that invest but waste, and those that invest as much as possible and waste as little as possible. In short, ‘nothing, a little, a lot, passionately’! And you have no doubt guessed for yourselves: the last category would be that of the socialist States ⁽¹⁸⁾.

For our part, having nothing new to discover, we rely on ‘classical’ Marxism. In the Marxist view, the State is a coercive organisation, ‘a cudgel’, which ensures the defence of the material interests of a social class (or a section of society) against others, to prevent antagonistic interests from tearing it apart. The State, therefore, is the product of given historical conditions, and not their cause, even though it may have an influence on the social infrastructure in the sense that it accelerates or slows down its development ⁽¹⁹⁾: but under no circumstances is it the State that can give direction to the movement nor ultimately prevent it from moving forward: whatever its intentions, the Holy Alliance was unable to prevent the birth of bourgeois Europe, and the great imperialist States – far more powerful than it – were just as incapable of preventing the birth of a bourgeois Asia.

To characterise a State, one must first characterise the society which constitutes its foundation: its mode of production, its stage of development, its relations with other societies and, above all, the ruling class. To draw the distinction between colonial and non-colonial States on the basis of formal political independence amounts to accepting the mystification perpetuated by the League of Nations or the UN. To compare Venezuela or Chile (bourgeois countries and nation-states) with Kuwait or the Congo (pre-capitalist societies with a colonial a-national State) simply because both export raw materials and have their own embassies is as absurd as comparing the Earth to the Sun simply because both revolve in circles...

If imperialism exports almost all the revenues generated in Black Africa to the metropolises, or if the ‘profligate’ sultans of the Persian Gulf spend their ‘fabulous’ revenues rather than investing them locally, it is quite simply because, for money to function as capital, social relations must allow for it: and this is not always the case in those regions. Capital and the capitalist mode of production are relations between men! ⁽²⁰⁾. Essentially, Baran ‘reproaches’ these states for failing to act as economic agents of capitalist development, and he thinks that it is the State (or violence) that makes and shapes society. On the contrary – and as Engels demonstrated against Dühring – violence and the State are only the expression of society.

As for the ‘comprador’ States, the low level of investment they undertake stems from the fact that they are the representatives of the domination of classes linked to landed, commercial, and usurer’s capital; in other words, the political expression of backward forms of capital. And the Indian state (belonging to the ‘a lot’ category, but not to the ‘passionately’ one!) is nothing but the expression of alliances between modern and backward, and even pre-capitalist, forms of capital (which, incidentally, gives it the character of the ‘powder keg of Asia’).

Since Baran sees nothing in the State other than an economic agent, we are not in the least surprised that his associate Sweezy rushes to applaud Allende’s anti-proletarian social-democratic regime in Chile: the path is always the same; it leads straight from revisionism to the... peaceful transition to socialism.

Like all vulgar thought, that is to say, one incapable of carrying out a serious analysis of capitalism and the historical transitions leading to it, Baran’s ‘theory’ purports to find confirmation in facts that are nothing more than banalities: ‘the extremely slow or virtually non-existent progress’ in the socio-economic development of backward regions!

All this inevitably brings to mind the petty bourgeois who measures human history in terms of his own Self, according to the length of ‘his life’. Indeed, a mere glance at the historical development of extra-European regions is enough to confirm that the transition from the old modes of production to capitalism accelerated, rather than slowed down, following the establishment of capitalism in Europe.

Here is a simplified table:

Europe: establishment of feudalism: 9th century (after Charlemagne). Beginning of capitalism: 16th century. Industrial Revolution (i.e. the real subsumption of labour under capital): 20th century.

Russia: Generalisation of serfdom: 18th century. Beginning of modern bourgeois society: 20th century.

Latin America: Stage of barbarism: 15th century. Beginning of bourgeois society: second half of the 19th century. Formation of modern bourgeois society: during the 20th century.

Asia: Generalised colonial policy which attacks Asian society: 19th century. 1905: beginning of the period of bourgeois revolutions.

Black Africa: Beginning of colonisation from the primitive forms of human society: second half of the 19th century.

A quick glance at this chronology is enough to notice that, in this historical ‘race’ towards capitalism, Europe is lagging far behind Russia, Latin America, and Asia. And this confirms, against Baran’s hollow claims, what Marxism was already saying a century ago.

But whilst acknowledging that capitalism has a historical possibility for development in non-white regions, we promise it the same fate as in the Euro-American area: death at the hands of the global proletariat.