Preliminary (incomplete) Draft of Work in Progress
Comments Welcome
Do U.S. Workers Gain from U.S. Imperialism?
Gerald Epstein*
First Draft: May 9, 2003
*Professor of Economics and Co-Director of the Political Economy Research Institute (PERI), University of Massachusetts, Amherst. I thank Anita Dancs, Carol Heim, Michael Klare, William Hartung, Stanley Malinowitz, Seymour Melman, Dorothy Power and Michael Remer for providing important materials and/or helpful discussion on aspects of this project. I also thank Dorothy Power for excellent research assistance. Unfortunately, I can't blame them for any remaining errors.
Abstract
This paper attempts to answer the following question: Do U.S. workers currently gain from U.S. imperialism? The tentative conclusion is that U.S. workers do not, on balance, gain from U.S. imperialism, at least since 1985. Though they gain from more stable and (probably) lower oil prices and the prices of other commodities, the tax system which shifts the cost burden of U.S. imperialism onto US workers, and cheap imports from abroad which are facilitated by US backed globalization that hurt U.S. workers’ wages and employment, on balance, U.S. workers loose substantially. On top of that, of course, are the costs to US workers, who make up most of the military, in blood.
The situation was probably different in the 1950', '60's and '70's. At that time, U.S. workers had much more power to extract rents from U.S. capitalists, and globalization tended to work to the benefit of U.S. workers. Therefore they had much more power to get a piece of the imperialist pie. Oil prices were extremely low and very stable. Taxes, which paid for U.S. imperialism were more progressive, so workers had to pay a lower share.
I. Introduction
This paper attempts to answer the following question: Do U.S. workers gain from U.S. imperialism? In writing this paper, I immediately ran up against a slight problem: this appears to be an almost unanswerable question.
For one thing, virtually every term in the question is ambiguous, and even contentious. First on the list, of course, is the term "U.S. imperialism". Many would vehemently deny that the U.S. engages in imperialism. Others would argue just as strongly on the other side. This debate is made much more difficult by a second central problem: what do we mean by the term imperialism? There is a huge literature on imperialism, but uses of the term are far more numerous than attempts to define it. And, to make matters worse, even when people do define the term, they do so in many different ways.[1] For example, should we define imperialism simply to mean colonial occupations? Should it refer only to military interventions, such as the U.S. interventions in Vietnam, Central America and Iraq? Or should we include the whole set of political and economic interventions used by the United States to promote the "Washington Consenus" of neo-liberalism?
In addition, there is the matter of the term "U.S. workers"? Is it all U.S. workers, including lawyers, doctors, etc. or is it the "working class" classically defined?
Then there is the word "gain". In some ways, this may be the most difficult problem of all. The problems here are many. First, do we mean only economic gains? Or do we also mean political, psychic, and security gains? Second, what "run" are we talking about: short-run, medium-run, long-run, long, long, long-run? Related to this is a third, and extremely difficult problem: what is the counter-factual? That is, what would the world look like if the U.S. did not engage in imperialism? Some classic theorists, Lenin, for example, argued that the cost of imperialism was war and the alternative would be socialism. Depending on what you think about socialism, this is a pretty easy call. Marx, on the other hand, who never used the word "imperialism", argued that colonialism was not inevitable or necessary, but that once it occurred, there was no going back. What is the counter-factual here? In a teleological approach to history, what does it even mean to talk about "counter-factuals"? (Brewer, 1990: chs, 2,3, and 6).
Perhaps the counterfactual we should assume is a more cooperative and peaceful, social democratic world. Or, perhaps it is just things more or less as they are, with less military intervention and a smaller defense budget (the closest thing to a "partial equilibrium" approach).
After having seen so many problems inherent in this exercise (and there are more), the reader might reasonably ask: why bother? There are least three reasons. First of all, many people think they already know the answer. When I proposed this paper, one of my colleagues sent me an email and said, "What's the answer? I assume it's no." And when I went to discuss these issues with another colleague he said, "Well, I assume the answer is yes." Faced with this, I thought it might be a good idea to try to move a bit beyond assumptions, but just how far beyond we can get remains to be seen.
Second, for someone, myself included, who believes that some form of political economy and class analysis is necessary for understanding the world, analyzing the distributional consequences of policies is critically important. In fact, this is my main motivation for writing this paper. What can explain U.S. workers' attitudes toward U.S. government policies such as the invasion of Iraq? Of course, there are many elements involved. But to what extent is this invasion and the whole set of international interventions of which it is a part in the "material interests" of U.S. workers? I somehow believe that making progress on answering this question will help us understand the forces driving such policies and, more importantly, the actions that could possibly change them.
For example, the U.S. population's attitudes toward the Iraq war have evolved from indifference, to concern and opposition, to -- it seems – wild enthusiasm. Does this support have an economic basis? If so, it might be more difficult to get workers on the side of an anti-imperialist political movement. On the other hand, whereas the AFL-CIO strongly supported the Viet Nam war and other U.S. military interventions in the 1950's, 60's and 70's, they opposed the U.S. invasion of Iraq in 2003. Does this evolution have a material basis? Does it make it more likely that the majority of workers could support an anti-imperialist policy? It would be nice to know the answer to these questions, and if not the answer, at least some range of likely answers.
In the next section, I very briefly discuss classical writers of imperialism and describe their views of the impact of imperialism on the well being of workers in the imperalist countries. We will see that the variety of answers they come to have to implicate this set of problems I have identified. Then I turn to empirical work, first looking at the existing studies which have tried to asses the impact of imperialism on workers. We will see, however, that that there is very little literature on the costs and benefits of imperialism in the United States to draw on. In fact, I could only find two papers, and neither of them explicitly studied the impact of U.S. imperialism on U.S. workers (Zevin, 1972; Lebergott, 1980). However, there is a vast economics literature on the costs and benefits of the British Empire. But even this literature includes relatively little discussion of the distributional impacts of British imperialism in Britain itself.[2]
In section four I briefly survey this literature because it will be helpful in developing a framework for studying U.S. imperialism. The section following, defines the term imperialism, in the ways for purposes of use this paper. It also describes the framework I use to assess if U.S. workers benefit from U.S. imperialism. In section V, I present the estimates. Section VI summarizes the conclusions and make suggestions for future research.
It is important to make clear at the outset what this paper is NOT about. This paper is not about what most of the literature on imperialism has concerned itself with. This paper is not about the causes of imperialism, for example, whether it is an inevitable part of capitalism, whether it is due to the export of capital, or underconsumption, or the search for raw materials, the interests of some narrow business interests, or a vestige of some previous class formation. (See Brewer, 1990 and Owen and Sutcliffe, 1972, for excellent discussions of many of these issues). It is also not about the impact of imperialism on groups other than U.S. workers. That is, itt is not about the impact of imperialism on profits, or, on the beneficiaries and victims of U.S. imperialism elsewhere in the world. Of course, these issues are all very important. And they inevitably interact with the issues discussed here at various points; indeed, at some points, I will not be able to avoid referring to them. But, however important these issues are, I am not writing about them in this paper because I am afraid I may have bitten off more than I can chew as it is.
II. Theories of Imperialism and Its Economic Impact on Workers in the Imperialist Countries[3]
Classical Theory
Of course, over the years, there has been an enormous amount of theoretical discussion about the distributional impact of empire and imperialism.[4] The classical authors in the Marxist tradition had something to say about this, but not a lot.
Writing about British imperialism in India, Marx notes:
"As to the working classes, it is still a much debated question whether their condition has been ameliorated at all…But perhaps also, in speaking of amelioration, the economists may have wished to refer to the millions of workers condemned to perish, in the East Indies, in order to procure for the million and a half of working people employed in England in the same industry, three years of prosperity out of ten (italics added). (Marx, Poverty of Philosophy, 1847, cited in Brewer, 1990, p. 52)
Evidently, Marx thought some workers might have gained financially from imperialism, but only in the very short run and only episodically.
According to Brewer, furthermore, "The quotations from Engels (not Marx) which Lenin used to link the idea of a 'labour aristocracy' to the possession of colonies…are very ambiguous, referring to the bourgeois ideas of some English workers rather than to any material benefit to them." (Brewer, 1990, p. 52).
By the time Lenin and Bukharin wrote, they were grappling with the virulent nationalism among the working classes in Europe which had helped to propel the first world war. Writing before the war, Hilferding, argued that imperialism was directly opposed to working class interests. However, it was harder to sustain this view when the war was taking place and working classes of Europe were slaughtering each other on the battlefields. Lenin and Bukharin argued that sections of the working classes in the dominant countries benefited from the dominant positions that monopoly industries had in the world market; but they both argued that wokers would do better under socialism. Whereas Bukharin tended to argue that workers in the dominant countries gained because the country did better as result of imperialism, Lenin insisted that the so-called "labour aristocracy", and more specifically, "skilled labor", especially those in specific industries linked to the colonies, that benefited the most. (Brewer, p. 125). Lenin argued that the capitalist class used these gains as a "bribe" to win labor's political acquiescence. (Brewer, p. 126). Still, Lenin strongly argued that since imperialism led to war, any short term economic benefits that workers received were overwhelmed by the horrendous costs of war. (Brewer, 1990, p. 124).
Luxembourg argued that, not only was imperialism inevitable under capitalism but that it was necessary to keep the economy functioning. Without it, the capitalist economy would sink into an under-consumptionist depression. (Brewer, 1990). Hence imperialism, by creating foreign markets and absorbing surplus, kept the capitalist economies growing. It is therefore hard to escape the conclusion that workers therefore benefit from imperialism, relative to being in a depressed and crisis-ridden economy. Of course, to the extent that imperialism forestalls the crisis and the day of reckoning for capitalism that ushers in socialism, then workers are worse off relative to that scenario. But what if a world of sustained stagnation and crisis is a possible long-run scenario. Might not imperialism which sustains economic growth make workers better off relative to that outcome?
Hobson's view presents an interesting contrast to Luxembourg's. Hobson, one of the intellectual fathers of Lenin's analysis of imperialism and a strong critic of British imperialism, believed that imperialism was both necessitated by and allowed British income inequality. Inequality constrained domestic demand of workers, requiring the British economy to expand abroad in search of markets. By this token, imperialism made British workers worse off (at least in a relative sense) by helping to maintain inequality[5]. Hobson argued that there was a better alternaive for workers within capitalism: a more equal distribution of income would lead to a domestic based economic growth, in modern parlance, "wage-led growth" and eliminate the need for imperialism. In short, even though imperialism helped to keep the economy growing it hurt workers because it maintained inequality, relative to an alternative, egalitarian development path within capitalism. (See Brewer, 1990; Cain, 1998; O'Brien, 1999).
More recent economists have grappled with these issues, at least implicitly. In his Political Economy of Growth, Paul Baran argued that imperialism and militarism was a mechanism for absorbing the economic surplus. According to this view, the "costs" of imperialism are in fact benefits since they keep the economy growing. Workers in the imperialist country therefore benefit to the extent that there is no alternative to the system. Otherwise, without imperialism and military spending, the economy would stagnate, harming workers in the process.[6]