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Economic imperialism is the foreign control of assets and decisions, even when such control existsin practice but notin law.[1]It can occur in both informal,postcolonial settings as well as formal,colonial ones, and involves the one-sided transfer ofcapital, labour, ornatural resources from one nation to another.[2]
In 1921, French ProfessorAchille Viallate (1866-1943) discussed economicimperialism as a trade and finance phenomenon in terms of "imperialist expansion [...] dictated by the desire of 'the great industrial nations' to find 'outlets both for the utilization of their available capital and for the surplus of their production'."[3]
Scholars have identified five modes of economic imperialism:colonialism,internal colonialism,settler colonialism,investment imperialism, andunequal exchange.[4]: 15
Colonialism is a system of domination characterised by the control of another territory, natural resources, and people by a foreign group.[5][6] It is most often applied to the domination of European societies over non-European ones via conquest and settlement from theAge of Discovery in the 15th century todecolonisation in the 20th century, however historical examples also include Europeans colonising other Europeans and non-Europeans colonising other non-Europeans. While colonialism sometimes indirectly led to development dependent on the autonomy/independence of the colonised population and their position in the internationaldivision of labour, it was overall harmful due to its role in thehistory of genocides,famine, andwar, and evidenced by the poles of contemporaryglobal inequality. Regions that were relatively rich in 1500 and were subsequently colonised became relatively poor.[4]: 16–17
Early industrial societies exported theirunemployment (caused bytechnical change and the displacement of small producers) to their colonies, either through settler migration or through enforcingfree trade and flooding colonial markets with goods produced in themetropole (causing unemployment in the colony). An example of this was the deindustrialisation ofIndia under British rule. Natural resources from colonies also fueled the metropole's industrial development, and the nature of colonial trade meant colonies were effectively paid for theirexports out of theirtax revenue, effectively eliminating theirexport surpluses. This all served to drain wealth from the colonies.[7][4]: 17–18
Internal colonialism is the uneven effects ofeconomic development on a regional basis, otherwise known as "uneven development", as a result of the exploitation ofminority groups within a wider society which leads topolitical andeconomic inequalities betweenregions within astate.[8] It is "a geographically-based pattern of subordination of a differentiated population, located within the dominant power or country". Internal colonies provide the metropole with accessible and disposable cheap labour, land, and natural resources.[4]: 18–19
Historical examples identified by scholars have included theUnited States andAfrican Americans andChicanos, theUnited Kingdom and Ireland, and theSoviet Union and Ukraine.[4]: 19
Settler colonialism is "a specific mode of domination where a community of exogenoussettlers permanently displace to a new locale, eliminate or displaceindigenous populations and sovereignties, and constitute an autonomous political body". It involves "land confiscation, the expulsion of the indigenous population, and the dispossession of its wealth and property". Settler colonies have also tended to subject indigenous populations todual labour markets and economic exploitation more often associated with internal colonialism. They typically can develop independently through "accumulation by dispossession".[4]: 20
Investment imperialism refers to the exporting of capital, in the form offoreign direct investment (FDI),portfolio investment, andloans, as economic imperialism. BothJohn Hobson andVladimir Lenin saw the export of capital as resulting fromeconomic inequality, which caused asavings glut (excessive wealth) among the rich andunderconsumption among the poor. This underconsumption, combined with domestic competition, caused a lack of domestic opportunity for high-return investment, incentivising investment in foreign markets. This investment can build pressure for political or military intervention due to the desire to protect high returns. TheHobson-Lenin thesis has historically received criticism, however scholars have acknowledged this as deriving from a misinterpretation.[9][4]: 21
In contradiction to this, Britain and France reimported capital from earlier investments, draining capital from foreign markets. For Britain,property income derived from overseas outweighed the outflow of capital for most of the 19th century, most of which went to settler colonies. In underdeveloped countries, labour and natural resources were cheap enough to not necessitate FDI. Likewise, the United States today is dependent on the inflow of capital from foreign markets. While British colonial investment in Africa did not producesuperprofits, exploitation of labour ensured profitability, and exporting capital released pressure on itsdiminishing marginal returns in the metropole (i.e., less profitable domestic alternatives), therefore improving the metropole'seconomic growth. While FDI is hypothetically conducive to diffusing technology and increasingliving standards globally, in practice after an initial growth spurt, if unregulated, it leads tomonopolies and a net outflow of capital for dependent countries.[4]: 21–23
Unequal exchange refers to exploitation ininternational trade, where one country contributes more labour or ecological resources than it receives in exchange. This derives from higherwage rates in some countries which encouragescapital-intensive rather thanlabour-intensive production, resulting in the "unequal exchange of labour time in monetarily equivalent trade between low-wage and high-wage countries in theworld economy", where workers in one country can buy proportionately more of another country'soutput with one hour of their labour.[4]: 23
In developed countries,real wages rose from the late 19th century following the success of thetrade union movement and highdemand for labour, with the implementation ofmass democracy building political pressure to maintain this. On the contrary, underdeveloped countries sawdeindustrialisation, disarticulation, andlabour market segmentation in theirdual economies, which resulted in low wages.[4]: 23–25
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Imperialism is the policies and actions followed by a nation or country to acquire more territory, impose its culture or language, or otherwise dominate another nation or country for the purpose of achieving its own end, be it military, political, or economic [...]. The subcategory 'economic imperialism' connotes 'foreign control of assets and decisions, including where such control exists in fact but not in law' [...].
Imperialism in this sense may be 'formal' or 'informal', 'colonial' or 'postcolonial', and implies the unrequited transfer of capital, labour, or natural resources from one nation or country to another [...].
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