Committee for the Abolition of Illegitimate Debt

What were the effects of imperialist domination on Third World countries?

Ernest Mandel : The gap in development and well-being between the so-called “Third World” countries and the imperialist metropolises has widened considerably during the imperialist era. This period began roughly in the 1890s. It is characterized in particular by the fact that in the metropolises, the export of capital replaces the export of goods as the main goal of the large industrial and financial enterprises, which are gradually transformed into monopolistic trusts.

The gap in development and well-being between the so-called “Third World” countries and the imperialist metropolises has widened considerably during the imperialist era. This period began roughly in the 1890s

As a result, the political domination is imposed on capital-importing countries. When goods are exported, problems cease as soon as they are paid for, usually after three months. When capital is exported, it is tied up and not fully profitable and recovered for years. Permanent political control must ensure this long-term profitability and recovery.
Thus, the imperialist powers turn most underdeveloped countries into colonies. In Asia and Africa, only Ethiopia, Iran, Afghanistan and China escaped this fate (the Ottoman Empire was in terminal crisis, but it survived somehow until the First World War).

But while retaining their formal political independence, they are increasingly becoming semi-colonial countries, i.e. countries controlled financially and economically by the imperialist powers. This is also the fate of the Latin American countries and the Balkan countries (after the First World War, the Eastern European countries).

Under imperialist domination, the modernization of colonial and semi-colonial countries is doubly blocked. On the one hand, the metropolises impose on them an economy that complements that of the imperialist countries. They confine them to the production and export of raw materials and agricultural products, very often even marked by monoculture Monoculture When one crop alone is cultivated. Many countries of the South have been induced to specialize in the production of a commodity for export (cotton, coffee, cocoa, groundnuts, tobacco, etc.) to procure hard currency for debt repayments. and monoproduction. The prices of these products are totally under the empire of the world market controlled by the big trusts and the big banks, subject to violent fluctuations. This gradually leads to the ruin of small producers, to misery and chronic unemployment. Hence the narrowness of the domestic market in these countries, which creates an additional obstacle to industrialization.

On the other hand, the colonial power maintains most often in place the old possessing classes in these countries, which practice the semi-feudal exploitation of the peasants. The agrarian rent is very high. The peasants get into more and more debt. They are exposed to usury which strangles them. There is thus a combination of capitalist exploitation and pre-capitalist exploitation. The maintenance of barbaric systems of oppression such as the caste system in India aggravates this overexploitation. All this can be summed up in the formula: modernization is blocked. In countries like India and China, the beginning of modernization that had occurred earlier is even reversed.

But after the Second World War, colonialism has basically disappeared?

Direct domination turned into indirect domination. Colonialism turned into neo-colonialism. Economic, financial and very often military dependence remained predominant, as in the semi-colonial countries

E.M. : It is true that the rise of the freedom movement in the colonies from the massive national liberation movement launched by Gandhi’s Congress Party and other political forces in 1942-1943 in India [1], powerfully stimulated in the aftermath of the war by the revolutions in Indonesia and Vietnam, and then above all by the victory of the Chinese revolution, led the colonial powers to gradually give up direct political domination over their colonies. The fact that the hegemonic imperialist power of the time, American imperialism, held few colonies, played a similar role. The abandonment of colonial structures paved the way for American domination to replace that of the former colonial powers. Egypt, for example, ceased to be dominated by Britain and came under the rule of the United States. The former colonies gained political independence, but this did not mean that they gained true independence from imperialism (with the exception of Indochina and North Korea).

Direct domination turned into indirect domination. Colonialism turned into neo-colonialism. Economic, financial and very often military dependence remained predominant, as in the semi-colonial countries. As a result, the obstacles on the way to economic development and overall social modernization remained predominant.

Has this blockage been and remains total?

E.M. : No. In this respect, many ideologists - both non-Marxists and those claiming to be Marxists - made serious errors of analysis and prediction, especially in the 1960s. In fact, a number of Third World countries have experienced the beginning of industrialization and modernization in two waves: the first between 1935 and 1955, especially in Latin America; the second later, especially from the 1970s, in a number of Asian countries, Brazil, South Africa, Iraq (in India and Egypt, the process had begun earlier).

The ones who are carrying this beginning of industrialization represent a coalition of forces in power that is quite different from the old dominant structures. These were based on an alliance between foreign imperialist capital, the so-called comprador bourgeoisie (traders and usurers) closely associated with foreign capital, and landowners and other traditional ruling classes.

The new coalition brings together a modernist wing of the military, an emerging indigenous monopoly bourgeoisie and some imperialist multinationals playing the card of semi-industrialization of the Third World.

Can we conclude from this that the industrialization and modernization of the Third World is still possible under capitalism, even if it takes a long time?

E.M.: Not at all. First of all, the countries that have undergone semi-industrialization constitute only a small minority of Third World countries. The vast majority of these countries continue to languish in pronounced underdevelopment. Secondly, it is a question of semi-industrialization and not of a progressively cumulative industrialization. The modern capitalist sector is generally combined with an archaic sector (Taiwan and South Korea being the two exceptions to this rule). This is clearly the case in India, Brazil, South Africa and Mexico.

The dependence on imperialism remains strong: technological and financial dependence above all, but also commercial and military

At the same time, dependence on imperialism remains strong: technological and financial dependence above all, but also commercial and military. Sudden reversals in the international economic situation bring development to a halt or even set it back. They confirm the vulnerability of these countries.

Finally, a new “unequal and combined development” is taking shape in these countries. Technological and financial dependence leads to a draining of resources towards the imperialist metropolises, through unequal exchange based on the difference in the level of average labor productivity with the metropolises. This drain obviously hampers long-term economic development. The new “power bloc” tries to counteract this handicap by putting pressure on wages (on “labor costs”). But since industrialization stimulated the development of the working class and thus the birth of a combative labor movement, it often resorted to dictatorial regimes or severe repressive measures to hinder this development.

This limits the size of the domestic market, makes industrialization dependent on the success of an unbridled export policy and thus increases dependence on the imperialist multinationals that dominate the world market.

But isn’t the draining of resources from the South to the North a general phenomenon that concerns the whole of the Third World, not just the semi-industrialized dependent countries?

The deterioration of the terms of trade (the ratio of the prices of exported products to the prices of imported products) alone has caused all the Third World countries to lose more resources in the last ten years than the servicing of the debt

E.M.: Indeed. It is true that the relatively more developed countries of the Third World have more resources and can therefore be more easily plundered than the poorest countries from which little can be obtained. Thus, most of the famous “Third World Debt” is concentrated in a few relatively less underdeveloped countries: Mexico, Brazil, South Korea, Argentina, etc. But this being said, it is a general phenomenon of plunder. The deterioration of the terms of trade (the ratio of the prices of exported products to the prices of imported products) alone has caused all the Third World countries to lose more resources in the last ten years than the servicing of the debt. The combined effect of this deterioration, of the growing debt, of the slowdown in growth as a result of the poor international economic situation, has been an appalling increase in the misery of the Third World. Western opinion, including that of the left, is not sufficiently aware of this. It does not yet react with the indignation and political know-how necessary to respond to this real rise in barbarism.

What does that mean?

E.M.: One billion human beings living in the poorest part of the Third World have experienced a deterioration in their average standard of living of between 30 and 40%. When we know how low this standard of living was already at the beginning, we realize how serious the phenomenon is. Their standard of living is that of a Nazi concentration camp before 1941. Every year, 16 million children die of hunger and perfectly curable diseases in Third World countries. Epidemics typical of misery, such as cholera, which in 1991 spread from Peru to the rest of Latin America, are on the rise. So-called natural disasters, such as those that regularly strike Bangladesh, are in reality disasters caused by the lack of resources devoted to infrastructure work, i.e. by underdevelopment.

Even from the point of view of the imperialist powers, this is a policy of scribbling. The consequences of this rise in appalling misery in the Third World are felt in the West and in Japan. The Third World is a not unimportant client of the imperialist powers. Its misery strangles the expansion of world trade.

That is why the “enlightened”, more liberal sectors of the imperialist bourgeoisie, representing above all the exporters and sometimes having social democrats like the German socialist Willy Brandt as their spokesman, have a more “reasonable” attitude to Third World debt and “Third World aid” than the more grizzled sectors in banking circles who are desperate to draw blood from stones...

De gauche à droite : Eric Toussaint, Hugo Blanco et Ernest Mandel (conférence CADTM à l’Université libre de Bruxelles en 1991)

Isn’t the plundering of the Third World the main source of the relative wealth of the imperialist countries, and therefore, also of the higher standard of living of the workers in the West and in Japan?

More than ever, the fundamental antagonisms are antagonisms between social classes and major fractions of social classes.

It is not that simple. Without a doubt, the overexploitation of Third World producers is a source of surplus profits for the monopolies and the big metropolitan bourgeoisie in general. The existence of these excess profits facilitates material concessions to the workers of the Western countries. But most of this surplus value in the total profits of this bourgeoisie is still reduced. Most of the surplus value that the imperialist monopolies capture is produced by the workers of the imperialist countries themselves: we would say roughly 80% or more. When profits fall in the North, the main response of big capital is to attack its own workers, it is the policy of austerity, it is the attacks on the direct and indirect wages of its own employees. These attacks result in a more limited reduction in the standard of living than that which occurs in the Third World. But, in absolute quantities, the additional global resources that flow to big capital in this way are much more considerable than those that come from the Third World.

In general, the world reality must be understood as based on a pyramid of power, wealth, resources and misery.

The great imperialist monopolies are at the top of the pyramid. Then come the “new” and “old” super-rich in the Third World countries themselves, who have become and continue to become particularly scandalously rich. Then come the middle classes of the so-called rich countries. Then the middle classes of the so-called poor countries. Then the Western proletariat. Then the proletariat and the poor peasants of the poor countries. Then the marginalized of the rich countries. Finally, the marginalized of the Third World.
A realistic view of this hierarchy refutes those who claim that the predominant struggle today is between nation and nation, or even race and race. More than ever, the fundamental antagonisms are antagonisms between social classes and major fractions of social classes.

So there is a real basis for international solidarity between workers from “rich” countries and workers from “poor” countries?

E.M.: Absolutely. The multinationals, the big monopolistic capital, apply more and more a global strategy. They move production sites, capital, labor, harmful production waste from one country to another, from one continent to another, from one ocean to another. They use the blackmail of moving production centers to low-wage countries (not only those of the Third World, by the way) as a permanent means of pressure on the labor movement and the working class of the metropolises: “accept wage cuts, otherwise we will have production done elsewhere where wages are lower”. But as the multinationals will always find countries where wages are even lower, accepting this blackmail would mean entering a vicious circle of permanent reduction of welfare in all countries.

This duty of solidarity implies the struggle to make the peoples of the West aware of the misery of the Third World, implies a struggle for the total cancellation of the debt of the Third World, implies a merciless struggle against all forms of racism and xenophobia

The only effective response to this global offensive of big capital is to oppose it with the common action of workers all over the world. That means: “All of us together will not accept any wage cuts anywhere. We will fight against layoffs everywhere, especially by means of a reduction in working hours”. The trade unions in the Third World must be helped to raise wages in their countries and not to lower wages in the West to the level of the Third World. This does not mean an obstacle to the development of the Third World. It implies another model of development, more focused on the development of consumption, the internal market, the progressive elimination of misery.

The initial impulse must come from the workers of the imperialist countries. It is a duty of solidarity that is combined with material interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. . This duty of solidarity implies the struggle to make the peoples of the West aware of the misery of the Third World, implies a struggle for the total cancellation of the debt of the Third World, implies a merciless struggle against all forms of racism and xenophobia.