What a reading of Marx and Lenin teaches us about the effects of multinational capital on poor nations
THE LAST WORD | Andrew Mwenda | Raymond Mujuni of NBS television tweeted that he has began his masters’ degree in development studies with a reading of Karl Marx. This column is a conversation with him on Marx’s insights on development. Marx was the first thinker to show the link between economic development and political action. Later thinkers within the Marxist tradition carried his ideas further. In this article I want to introduce Mujuni to the ideas of Marx and Vladmir Lenin.
Marx saw capitalism as a progressive force which, he argued, would be transmitted from advanced countries (through colonialism and/or free trade) and which would spread to “backward” societies by a continual process of destruction and development of their pre capitalist structures. He argued that as a result of this process, a series of new capitalist societies would emerge whose development would be similar to advanced nations.
For Marx, the central element behind the need for capitalist economies to expand is the tendency of the rate of profit to fall. Such expansion makes it possible to expand the scale of production, to lower the costs of raw materials and the products needed to maintain and replace the labour force at home (making it possible to keep wages low) and thus to increase the supply by helping to preserve the low organic composition of capital.
Marx distinguished between the subjective motivation behind this expansion and its objective historic results. Thus, he condemns the process as brutalising and dehumanising but also argues that it is absolutely necessary if backward societies are to develop. For Marx only capitalism could provide the necessary economic and technological infrastructure that will enable society for the free development of every member according to his capacity.
Marx also argued that capitalism would not evolve in poor societies through the internal development of their productive forces but through its penetration and imposition from the advanced countries. He made no distinction between the capitalism of the West (which developed organically) and that of poor societies (which would be imported through colonialism). He argued that regardless of how capitalism comes about in any society, it would produce poverty and wealth alongside each other – creating the rich and the poor in the society.
Thus Marx saw the necessity of capitalism to improve the development of productive forces and the viability of its development in poor societies. His concern was with the “necessity” of capitalist development and he took its “viability” for granted. He died when colonialism was still in infancy. It was left to his followers to observe the effects and explain them. Lenin undertook this task.
In `The Development of Capitalism in Russia’, Lenin analyses how capitalism in that country is articulated both to the economies of Western Europe and to the other existing modes of production within Russia itself. He argued that capitalist development in Russia was slow because of three specific issues.
First was the weakness of the Russian bourgeoisie as an agent for furthering of capitalist development in that country. Second was the effect of competition from Western Europe in slowing down the growth of modern industry in Russia. Third was the great and unexpected capacity for survival of the traditional structures of Russian society.
Lenin concluded that the particular features of development of capitalism in any backward society would depend significantly on the characteristics of the pre capitalist mode of production. In the case of Latin American nations like Brazil, Mexico and Chile, which were attempting to industrialise in the same period as Russia, Lenin held that the social formations inherited from Spanish and Portuguese colonialism were very different from Russia.
Hence Lenin appreciated that societies and states are not generic. They vary greatly in their history and circumstances and these impose different possibilities and limits on what they can do or not do and how they can do it or fail to and with what effect.
Lenin identified the economic expansion of Western advanced nations in the financial and productive spheres. For Lenin, Finance and production are interrelated. The financial driving forces are related to the need to find new opportunities for investment because their own economies are unable to generate such opportunities at the rate at which they generate capital. Those of the productive forces are related to the necessity to ensuring supply of raw materials and markets for manufactured products.
The result of this, according to Lenin (as it was for Marx) would be a tendency toward the integration of the global economy, a considerable degree of capital movement and an international division of labour, which would restrict the growth of backward societies to the production of raw materials.
In fact, Lenin argued that for raw materials in poor countries to be supplied to advanced nations cheaply, labour in these countries had to be kept at subsistence level. Thus as a result of the expansion of advanced capitalist economies (as they enter the monopoly phase of their development), the economies of backward societies will be characterised by increasing indebtedness and by a productive structure which leads them to produce what they don’t consume and consume what they don’t produce.
Lenin argued that if this relationship was set in the colonial period it would be unequal and therefore the possibilities for capitalist development would be restricted. But if they were shaped in a post colonial context, the possibilities for capitalist development would depend on the national bourgeoisie and other dominant groups in the poor country to establish a more favourable relationship with advanced countries in the global system.
Lenin argued that imperialism would tend to hinder industrialisation in colonies but once independence is attained, the poor countries would be able to develop in a different way and eventually would industrialise. This is where it is difficult to disentangle the programmatic and the analytical strands in Lenin’s argument. This is perhaps because he was both a philosopher-thinker and a practical politician with an agenda for action. I think the politician could have taken over from the thinker.
He argued that although attempts by poor countries to industrialise in the postcolonial context would face problems and contradictions (because of the presence of foreign capital and technology) but as was the case was with Russia they too would overcome these and industrialise eventually. Since Africa’s leaders believe attracting Foreign Direct Investment (FDI) is the pathway to industrial transformation, they need to read Lenin and other thinkers of the imperialism school to appreciate the limits of FDI.