The New Debt Colonies

Street art in Athens by
Street art in Athens by

We think the debt has to be seen from the stand­point of its ori­gins. The ori­gins of the debt arise from the ori­gins of colo­nial­ism. Those who lend us mon­ey are the same who col­o­nized us before. They are those who used to man­age our states and economies.
– Thomas Sankara (1987)

God save us from the debt, and we shall be con­tent.
– Simón Bolí­var (1825)

Today we are wit­ness­ing the resur­gence of an old phe­nom­e­non: the debt colony. A decade after the col­lapse the U.S. hous­ing bub­ble and the onset of the worst cap­i­tal­ist cri­sis in liv­ing mem­o­ry, gov­ern­ments around the world con­tin­ue to bear the bur­den of his­tor­i­cal­ly unprece­dent­ed pub­lic debt loads. In some cas­es, most spec­tac­u­lar­ly in the periph­er­al coun­tries of the Euro­zone but also in a num­ber of emerg­ing mar­kets, these mount­ing finan­cial oblig­a­tions have led to crip­pling sov­er­eign debt crises – which have in turn impelled the dom­i­nant cred­i­tor pow­ers to inter­vene aggres­sive­ly on for­eign bond­hold­ers’ behalf, impos­ing high­ly intru­sive regimes of inter­na­tion­al finan­cial super­vi­sion on dis­tressed bor­row­ers in order to ensure con­tin­ued debt ser­vic­ing. The fis­cal auton­o­my of Greece and Puer­to Rico, in par­tic­u­lar, has now been abol­ished in all but name, although sim­i­lar process­es have long been afoot else­where as well.

This con­tem­po­rary expe­ri­ence in turn car­ries strong his­tor­i­cal echoes. A cen­tu­ry and a half ago, Karl Marx already observed how the emer­gence of the nation­al debt in ear­ly-mod­ern Europe con­sti­tut­ed one of the “most pow­er­ful levers of prim­i­tive accu­mu­la­tion,” lead­ing to the “alien­ation of the state” by pri­vate financiers and “giv­ing rise to stock exchange gam­bling and the mod­ern bankoc­ra­cy.” These dynam­ics inten­si­fied dur­ing the Age of Impe­ri­al­ism in the late 19th and ear­ly 20th cen­turies, when the export of Euro­pean and U.S. cap­i­tal to the new­ly inde­pen­dent coun­tries of Latin Amer­i­ca and the Mediter­ranean added an inter­na­tion­al dimen­sion to this long-stand­ing process of dis­pos­ses­sion through debt. Dur­ing this peri­od, the dom­i­nant cred­i­tor pow­ers reg­u­lar­ly sub­ject­ed dis­tressed sov­er­eign bor­row­ers to exter­nal finan­cial con­trol – often under force of arms. The British inva­sion of Egypt in 1882, the Ger­man push to estab­lish an Inter­na­tion­al Finan­cial Com­mis­sion in Greece in 1898, and the appear­ance of Euro­pean gun­boats on the Venezue­lan coast in 1902 are but some of the most promi­nent cas­es in point.

Today, such long-stand­ing process­es of finan­cial sub­ju­ga­tion con­tin­ue in a new form – through what has euphemisti­cal­ly come to be known as “inter­na­tion­al cri­sis man­age­ment.” Ever since the Mex­i­can debt cri­sis of 1982, banks and bond­hold­ers in the wealthy cred­i­tor coun­tries have increas­ing­ly come to rely on their own gov­ern­ments and inter­na­tion­al finan­cial insti­tu­tions like the IMF and World Bank to impose painful struc­tur­al adjust­ment pro­grams on cri­sis-strick­en debtor coun­tries in the devel­op­ing world. Over the course of two decades, inter­na­tion­al cred­i­tors – pri­vate and offi­cial alike – went on to plun­der the immense wealth of the Glob­al South, from Argenti­na to Zaire, aggres­sive­ly open­ing up local economies to for­eign cap­i­tal and restruc­tur­ing them in line with the neolib­er­al pre­rog­a­tives of the Wash­ing­ton Con­sen­sus. The result has been a vast flow of cap­i­tal “upstream,” from pub­lic hands in the glob­al periph­ery to pri­vate hands in the advanced cap­i­tal­ist core, with devel­op­ing coun­tries trans­fer­ring an esti­mat­ed $4.2 tril­lion in inter­est pay­ments to their cred­i­tors in Europe and North Amer­i­ca since 1982, far out­strip­ping the offi­cial-sec­tor devel­op­ment aid these coun­tries received dur­ing the same peri­od.1

In the wake of the glob­al finan­cial cri­sis, these same meth­ods have now come to be applied on a mas­sive scale in the cap­i­tal­ist heart­land itself. The result has not just been a new wave of “accu­mu­la­tion by dis­pos­ses­sion,” but in some cas­es also the effec­tive abo­li­tion of nation­al sov­er­eign­ty. When Greece’s fledg­ling Prime Min­is­ter Alex­is Tsipras was forced into a humil­i­at­ing capit­u­la­tion to his Euro­pean cred­i­tors in the sum­mer of 2015, for instance, an anony­mous diplo­mat from a Ger­many-allied coun­try can­did­ly described the terms of sur­ren­der as “akin to turn­ing Greece into an eco­nom­ic pro­tec­torate.”2 In his mem­oirs of his brief tenure as Greece’s finance min­is­ter, Yanis Varo­ufakis repeat­ed­ly denounces the cred­i­tors’ finan­cial intim­i­da­tion tac­tics as an exam­ple of “lat­ter-day gun­boat diplo­ma­cy.” When Poland’s for­eign min­is­ter was asked for the rea­son behind his country’s refusal to join the euro, all he had to do was point south: “Greece is de fac­to a colony,” he explained, “We don’t want to repeat this sce­nario.”

These ongo­ing devel­op­ments raise a num­ber of impor­tant ques­tions about the rela­tion­ship between con­tem­po­rary pat­terns in inter­na­tion­al cri­sis man­age­ment and Europe and America’s long-stand­ing his­to­ry of finan­cial impe­ri­al­ism. How dif­fer­ent is our con­tem­po­rary era real­ly from the “era of gun­boat diplo­ma­cy” in the late 19th and ear­ly 20th cen­turies, when the dom­i­nant cred­i­tor pow­ers also reg­u­lar­ly inter­vened in the debtors’ sov­er­eign affairs to defend bond­hold­er inter­ests? What are the con­ti­nu­ities and dis­con­ti­nu­ities between the two peri­ods? And can the hot­ly debat­ed and polem­i­cal notion of impe­ri­al­ism still serve as a use­ful ana­lyt­i­cal tool to help us make sense of the cur­rent con­junc­ture? If so, how far can the clas­si­cal Marx­ist the­o­ries of the phe­nom­e­non take us in elu­ci­dat­ing the asym­met­ric pow­er rela­tions at the heart of the con­tem­po­rary glob­al polit­i­cal econ­o­my – and what, if any­thing, can be done to revamp exist­ing the­o­ret­i­cal frame­works to bet­ter reflect the endur­ing rel­e­vance of impe­ri­al­ism in our time?

In what fol­lows, I will argue that impe­ri­al­ism clear­ly remains an impor­tant fac­tor in the ear­ly 21st cen­tu­ry – even if the orig­i­nal Marx­ist accounts require exten­sive revi­sion in light of the recent trans­for­ma­tions of glob­al cap­i­tal­ism. The last­ing con­tri­bu­tion of the clas­si­cal the­o­rists was to anchor their cri­tiques of impe­ri­al­ism with­in a broad­er cri­tique of polit­i­cal econ­o­my, high­light­ing the cen­tral role of finance in dri­ving impe­ri­al­ist rela­tions of dom­i­na­tion. This, I argue, should remain the start­ing point for any con­tem­po­rary analy­sis of impe­ri­al­ism. At the same time, how­ev­er, the clas­si­cal the­o­ries also suf­fered from a num­ber of impor­tant lim­i­ta­tions. Most con­se­quen­tial­ly, per­haps, they tend­ed to empha­size the more overt man­i­fes­ta­tions of impe­ri­al­ist pow­er (ter­ri­to­r­i­al con­quest and mil­i­tary inter­ven­tion) at the expense of its more sub­tle, struc­tur­al dynam­ics (oper­at­ing through the glob­al finan­cial sys­tem), which end­ed up blind­ing them to some of the under­ly­ing depen­den­cies that lat­er kept the asym­met­ric pow­er rela­tions between debtors and cred­i­tors in place even in the absence of ter­ri­to­r­i­al con­quest or mil­i­tary inter­ven­tion.

To bet­ter reflect the per­sis­tence of these more sub­tle dynam­ics of impe­ri­al­ist dom­i­na­tion, I pro­pose to approach the prob­lem from a some­what dif­fer­ent angle, name­ly from the van­tage point of “the new debt colonies” them­selves. In the sec­ond half of this piece, I will briefly out­line the con­tours of an alter­na­tive, state-the­o­ret­i­cal approach to the study of impe­ri­al­ism, cen­ter­ing on the state’s struc­tur­al depen­dence on for­eign cred­it and invest­ment. Such an approach would stress the ways in which glob­al finan­cial mar­kets, inter­na­tion­al finan­cial insti­tu­tions and local com­prador elites inside the debtor coun­tries all act as impor­tant con­vey­ors for the exer­cise of impe­ri­al­ist pow­er, high­light­ing the lim­its of a nar­row­ly state-cen­tric pol­i­tics of nation­al lib­er­a­tion, which can at best replace one form of colo­nial dom­i­na­tion (ter­ri­to­r­i­al depen­dence) with anoth­er (finan­cial depen­dence), while at worst becom­ing a new source of oppres­sion for the work­ing class­es of the new­ly inde­pen­dent state. Before fur­ther elab­o­rat­ing on these points, how­ev­er, we will first need to review both the strengths and weak­ness­es of the orig­i­nal Marx­ist accounts.

The “Economic Taproot” of Imperialism

If the clas­si­cal the­o­ries of impe­ri­al­ism had one strong point in com­mon, it is the pride of place that all of them accord­ed to finance and inter­na­tion­al loans. The first major study to estab­lish this con­nec­tion actu­al­ly came from the hand of a bour­geois lib­er­al the­o­rist, J. A. Hob­son, whose work went on to inspire Lenin’s short trea­tise on the sub­ject. In Impe­ri­al­ism: A Study (1902), Hob­son sought to uncov­er what he called “the eco­nom­ic tap­root” behind the dri­ve towards ter­ri­to­r­i­al expan­sion and inter-impe­ri­al­ist con­flict and com­pe­ti­tion.3  His basic the­sis was that the rise of monop­oly cap­i­tal had con­cen­trat­ed prof­its into ever few­er hands, lead­ing to increased sav­ings and chron­ic under­con­sump­tion. In the absence of prof­itable invest­ment oppor­tu­ni­ties at home, cap­i­tal­ists began to look for oth­er out­lets for their excess sav­ings, lead­ing to the export of cap­i­tal abroad. This in turn gen­er­at­ed strong pres­sures for the lead­ing cap­i­tal­ist states to annex for­eign ter­ri­to­ries in order to pry open new mar­kets and safe­guard exist­ing invest­ments.

In this scheme, Hob­son ascribed a most promi­nent role to pri­vate financiers as “the gov­er­nors of the engine” of impe­ri­al­ism, observ­ing how “these great busi­ness­es – bank­ing, broking, bill dis­count­ing, loan float­ing, com­pa­ny pro­mot­ing – form the cen­tral gan­glion of inter­na­tion­al cap­i­tal­ism.” Through their high degree of inter­nal orga­ni­za­tion and close per­son­al inter­con­nec­tions, bankers and investors are unique­ly capa­ble of exert­ing pres­sure on their home gov­ern­ments to pur­sue an impe­ri­al­ist pol­i­cy abroad. Vio­lence and com­pul­sion thus become part and par­cel of the process of eco­nom­ic expan­sion, as the state embraces a “spir­it­ed for­eign pol­i­cy dic­tat­ed by bond-hold­ers.” The polit­i­cal analy­sis behind these claims, how­ev­er, remained extreme­ly crude, hing­ing on an ill-defined con­spir­a­cy the­o­ry with strong anti-Semit­ic over­tones. Finance, for Hob­son, was sim­ply a “par­a­sit­i­cal” spe­cial inter­est “con­trolled, so far as Europe is con­cerned, chiefly by men of a sin­gle and pecu­liar race, who have behind them many cen­turies of finan­cial expe­ri­ence [and who] are in a unique posi­tion to con­trol the pol­i­cy of nations.”4 This trou­bling view, wide­spread even in pro­gres­sive cir­cles at the time, fore­shad­owed some of the lat­er Nazi tropes about the all-pow­er­ful Jew­ish financier.

The clas­si­cal Marx­ist the­o­rists, by con­trast, sought a much more sys­tem­at­ic under­stand­ing of the specif­i­cal­ly cap­i­tal­ist log­ic of impe­ri­al­ism. In The Accu­mu­la­tion of Cap­i­tal (1913), Rosa Lux­em­burg devel­oped a par­tic­u­lar­ly ambi­tious the­o­ret­i­cal argu­ment to this end. Her analy­sis showed some sim­i­lar­i­ties to Hobson’s, in the sense that she ulti­mate­ly locat­ed the “eco­nom­ic tap­root” of ter­ri­to­r­i­al expan­sion­ism, inter­na­tion­al rival­ry, and cap­i­tal­ist mil­i­tarism in endem­ic under­con­sump­tion in the home mar­ket. Unlike Hob­son, how­ev­er, she based her analy­sis on what she thought was a flaw in Marx’s orig­i­nal scheme of expand­ed repro­duc­tion, locat­ing the rea­sons for insuf­fi­cient demand not in excess sav­ings on the part of the monop­o­lists, but in the increas­ing exploita­tion of the work­ing class­es in the advanced cap­i­tal­ist soci­eties, a ten­den­cy that pre­clud­ed the own­ers of cap­i­tal from real­iz­ing their sur­plus val­ue at home and ulti­mate­ly com­pelled them to search for oth­er sources of demand “out­side” of the cap­i­tal­ist cir­cu­la­tion process. As a result, Lux­em­burg believed, cap­i­tal­ism depends on the con­stant inva­sion, sub­ju­ga­tion and exploita­tion of its non-cap­i­tal­ist envi­ron­ment to secure its own sur­vival.

This read­ing did not real­ly stand the test of time. As Har­vey notes, “few would now accept Luxemburg’s the­o­ry of under­con­sump­tion as the expla­na­tion of crises.”5 Nev­er­the­less, the the­o­ret­i­cal and his­tor­i­cal analy­sis pre­sent­ed by Lux­em­burg made a num­ber of sig­nif­i­cant and endur­ing con­tri­bu­tions to our con­tem­po­rary under­stand­ing of impe­ri­al­ism. In his own work, Har­vey has famous­ly revived Luxemburg’s empha­sis on the “dual char­ac­ter” of cap­i­tal accu­mu­la­tion, which does not only revolve around the eco­nom­ic process­es of “the com­mod­i­ty mar­ket and the place where sur­plus val­ue is pro­duced – the fac­to­ry, the mine, the agri­cul­tur­al estate,” but also “con­cerns the rela­tions between cap­i­tal­ism and the non-cap­i­tal­ist modes of pro­duc­tion.” For Lux­em­burg, the pre­dom­i­nant meth­ods of cap­i­tal accu­mu­la­tion per­tain­ing to this lat­ter domain are “colo­nial pol­i­cy, an inter­na­tion­al loan system…and war.” Unlike the rel­a­tive­ly peace­ful process of pro­duc­tion and exchange, the lat­ter rela­tions are open­ly char­ac­ter­ized by “force, fraud, oppres­sion, loot­ing,” so that “it requires an effort to dis­cov­er with­in this tan­gle of polit­i­cal vio­lence and con­tests of pow­er the stern laws of the eco­nom­ic process.”6

While Lux­em­burg did not elab­o­rate on the role of finance as such, she did hone in on the impor­tance of inter­na­tion­al loans and the ways in which sov­er­eign debt and for­eign direct invest­ments can quick­ly become instru­ments of colo­nial sub­ju­ga­tion. “In the Impe­ri­al­ist Era,” she writes, “the for­eign loan played an out­stand­ing part as a means for young cap­i­tal­ist states to acquire inde­pen­dence.” This depen­dence on for­eign cred­it, how­ev­er, had a con­tra­dic­to­ry effect on the new­ly inde­pen­dent coun­tries: “Though for­eign loans are indis­pens­able for the eman­ci­pa­tion of the ris­ing cap­i­tal­ist states,” she keen­ly observed, “they are yet the surest ties by which the old cap­i­tal­ist states main­tain their influ­ence, exer­cise finan­cial con­trol and exert pres­sure on the cus­toms, for­eign and com­mer­cial pol­i­cy of the young cap­i­tal­ist states.”7

The Rule of Finance Capital

Luxemburg’s insights on the asym­met­ric pow­er rela­tions at the heart of the inter­na­tion­al cred­it sys­tem clear­ly con­tin­ue to res­onate today. It was left to the Aus­tro-Marx­i­an econ­o­mist Rudolf Hil­fer­d­ing, how­ev­er, to devel­op the most sys­tem­at­ic analy­sis of the inti­mate con­nec­tions between mon­ey, cred­it, bank­ing, empire, and war. Hailed at the time as a land­mark con­tri­bu­tion to Marx­ist the­o­ry, Hilferding’s clas­sic work – Finance Cap­i­tal: A Study of the Lat­est Phase of Cap­i­tal­ist Devel­op­ment (1910) – set out to uncov­er the deep­er dynam­ics behind the con­cen­tra­tion and cen­tral­iza­tion of cap­i­tal, the ten­den­cy towards the for­ma­tion of monop­o­lies, trusts and car­tels, the grow­ing depen­dence of firms on cred­it, the ris­ing impor­tance of the banks, the ever-clos­er prox­im­i­ty between bank cap­i­tal and indus­tri­al cap­i­tal, the car­tels’ vocal demands for state inter­ven­tion, and the ways in which these dynam­ics in turn impact­ed the struc­ture of the cap­i­tal­ist econ­o­my, lead­ing to monop­o­list demands for eco­nom­ic pro­tec­tion­ism, feed­ing the export of cap­i­tal abroad, and dri­ving the mil­i­taris­tic for­eign pol­i­cy of impe­ri­al­ism that was asso­ci­at­ed with it. “The most char­ac­ter­is­tic fea­tures of ‘mod­ern’ cap­i­tal­ism,” he wrote,

… are those process­es of con­cen­tra­tion which, on the one hand “elim­i­nate free com­pe­ti­tion” through the for­ma­tion of car­tels and trusts, and on the oth­er, bring bank and indus­tri­al cap­i­tal into an ever more inti­mate rela­tion­ship. Through this rela­tion­ship cap­i­tal assumes the form of finance cap­i­tal, its supreme and most abstract expres­sion. … No under­stand­ing of present-day eco­nom­ic ten­den­cies, and hence no kind of sci­en­tif­ic eco­nom­ics or pol­i­tics, is pos­si­ble with­out a knowl­edge of the laws and func­tion­ing of finance cap­i­tal.8

As bank cap­i­tal becomes more con­cen­trat­ed and the econ­o­my ever more depen­dent on cred­it, Hil­fer­d­ing not­ed, “the pow­er of the banks increas­es and they become founders and even­tu­al­ly rulers of indus­try, whose prof­its they seize for them­selves as finance cap­i­tal.”9 In the process, “the spe­cif­ic char­ac­ter of cap­i­tal is oblit­er­at­ed,” and finance cap­i­tal “now appears as a uni­tary pow­er which exer­cis­es sov­er­eign sway over the life process of soci­ety.” The “lat­est phase” of cap­i­tal­ist devel­op­ment there­fore endows pri­vate bankers with a high­ly con­cen­trat­ed form of eco­nom­ic and polit­i­cal pow­er, which they active­ly mobi­lize in order to push the state to erect pro­tec­tive bar­ri­ers against for­eign com­peti­tors and rival car­tels.10

At the same time, the accu­mu­la­tion of excess monop­oly prof­its at home leads to a search for lucra­tive invest­ment oppor­tu­ni­ties abroad, result­ing in for­eign invest­ments, “which extends the eco­nom­ic region and the scale of pro­duc­tion,” and in turn “requires the sup­port and active inter­ven­tion of the state, in acquir­ing and main­tain­ing con­trol over the new eco­nom­ic areas.” 11 All of this leads to a dra­mat­ic change in the rela­tion­ship of the cap­i­tal­ist class to state pow­er, as the big banks that dom­i­nate nation­al indus­try begin to active­ly spon­sor a for­eign pol­i­cy of impe­ri­al­ism. Finance cap­i­tal, Hil­fer­d­ing notes, “does not want free­dom, but dom­i­na­tion”:

It needs the state which can guar­an­tee its domes­tic mar­ket through a pro­tec­tive tar­iff pol­i­cy and facil­i­tate the con­quest of for­eign mar­kets. It needs a polit­i­cal­ly pow­er­ful state which does not have to take account of the con­flict­ing inter­ests of oth­er states in its com­mer­cial pol­i­cy. It needs also a strong state which will ensure respect for the inter­est of finance cap­i­tal abroad, and use its polit­i­cal pow­er to extort advan­ta­geous sup­ply con­tracts and trade agree­ments from small­er states; a state which can inter­vene in every cor­ner of the globe and trans­form the whole world into a sphere of invest­ment for its own finance cap­i­tal.12

The com­pe­ti­tion for colo­nial acqui­si­tions and the defense of exist­ing ter­ri­to­ries sub­se­quent­ly leads to grow­ing ten­sions between the cap­i­tal­ist pow­ers them­selves, increas­ing the threat of an all-out impe­ri­al­ist war. This point was stat­ed even more force­ful­ly by Niko­lai Bukharin, who con­sid­ered glob­al con­flict to be an inevitable out­growth of the ascen­dan­cy of finance cap­i­tal. In his Impe­ri­al­ism and World Econ­o­my (1918), the Bol­she­vik the­o­rist set out to take Hilferding’s analy­sis to the inter­na­tion­al lev­el, devel­op­ing what could be con­sid­ered an ear­ly account of finan­cial glob­al­iza­tion.13  Bukharin reit­er­at­ed that “world finance cap­i­tal­ism and the inter­na­tion­al­ly orga­nized dom­i­na­tion of the banks are one of the unde­ni­able facts of eco­nom­ic real­i­ty,” and he stressed how the con­cen­tra­tion and cen­tral­iza­tion of cap­i­tal had pro­duced a sit­u­a­tion in which nation­al economies had been trans­formed “into one gigan­tic com­bined enter­prise under the tute­lage of the finan­cial kings and the cap­i­tal­ist state.”14

Lenin, for his part, most­ly repro­duced these pri­or insights, and did not real­ly make any impor­tant the­o­ret­i­cal advances with­in the ambit of the clas­si­cal debate. Nev­er­the­less, his wide­ly-cit­ed pam­phlet – Impe­ri­al­ism: The High­est Stage of Cap­i­tal­ism (1917) – did help pop­u­lar­ize Hobson’s analy­sis of cap­i­tal export and Hilferding’s notion of finance cap­i­tal, explain­ing in sim­ple terms how the com­bi­na­tion of the two had led to the vio­lent sub­ju­ga­tion of the whole world to the dic­ta­tor­ship of a “finan­cial oli­garchy.” In his terse polem­i­cal style, Lenin open­ly railed against the “finan­cial maraud­ers” whose “par­a­sitism” – a term he adopt­ed from Hob­son – had led to a “world sys­tem of colo­nial repres­sion,” involv­ing the “finan­cial stran­gu­la­tion of the over­whelm­ing major­i­ty of the peo­ple of the world by a hand­ful of ‘advanced coun­tries.’”15 As finance cap­i­tal “spreads its net over all coun­tries,” Lenin not­ed, it divides the world “into a hand­ful of usurer states on the one side, and a vast major­i­ty of debtor states on the oth­er.”16 It is pre­cise­ly here, in the asym­met­ric pow­er rela­tions between sov­er­eign debtors and their for­eign cred­i­tors, that we find both some of the most strik­ing sim­i­lar­i­ties and some of the most impor­tant dif­fer­ences between the clas­si­cal impe­ri­al­ism of Lenin’s time and the “new debt colo­nial­ism” of today.

Sovereign Debt and Default

Dur­ing the clas­si­cal impe­ri­al­ist era, the export of cap­i­tal pre­dom­i­nant­ly came in two forms: that of inter­na­tion­al loans to for­eign gov­ern­ments (in the form of bond finance), and that of for­eign direct invest­ments (in the form of fixed cap­i­tal). In the ear­ly days of glob­al cap­i­tal mar­kets, the sale of gov­ern­ment bonds made up the bulk of inter­na­tion­al trans­ac­tions. From the 1820s onwards, as most of Latin Amer­i­ca gained inde­pen­dence, pow­er­ful Lon­don-based mer­chant banks like the House of Roth­schild and the House of Bar­ings became active inter­me­di­aries in this process of inter­na­tion­al lend­ing to the new­ly inde­pen­dent periph­er­al bor­row­ers, under­writ­ing the oblig­a­tions of cred­it­wor­thy for­eign gov­ern­ments by stamp­ing the latter’s bonds with their fam­i­ly seal and under­tak­ing to sell these debt secu­ri­ties to retail investors on the Lon­don Stock Exchange. Lat­er, from the 1880s onwards, the mer­chant banks increas­ing­ly began to turn towards the mobi­liza­tion of large sums of cap­i­tal for direct for­eign invest­ments – espe­cial­ly fixed cap­i­tal in min­ing, agri­cul­ture and the con­struc­tion of rail­ways, canals, tele­graph lines, etc.

As in oth­er domains of the cap­i­tal­ist econ­o­my, the watch­word in this rapid­ly expand­ing world of high finance was monop­oly pow­er. Through­out the so-called Pax Bri­tan­ni­ca (1820–1914), the total mar­ket share for sov­er­eign bond issues under­writ­ten by the three biggest inter­me­di­ary banks in Lon­don nev­er fell below 50 per­cent. In the first major inter­na­tion­al lend­ing boom of the 1820s, the Roth­schild and Bar­ing banks alone ini­ti­at­ed over half of all emerg­ing mar­ket loans, with “the House of Roth­schild surpass[ing] all oth­er under­writ­ers in terms of mar­ket share, cap­i­tal stock, and per­for­mance.”17 A hand­ful of pow­er­ful financiers thus effec­tive­ly held sway over the cred­it access of a vast array of devel­op­ing coun­try gov­ern­ments, allow­ing these pri­vate bankers to set the terms of bor­row­ing and there­by indi­rect­ly con­trol the con­di­tions under which the new­ly inde­pen­dent states sought to inte­grate them­selves into the cap­i­tal­ist world econ­o­my.

In the ear­ly 20th cen­tu­ry, as the Unit­ed States took over sov­er­eign lend­ing to its Latin Amer­i­can and Caribbean neigh­bors from the British, the Lon­don-based financiers were grad­u­al­ly dis­placed by pow­er­ful U.S. bank­ing hous­es like the Rock­e­fellers and J. P. Mor­gan. Just as their British coun­ter­parts, these Amer­i­can “kings of finance” – or “rob­ber barons” as they came to be known – gen­er­al­ly did not hold for­eign gov­ern­ment bonds them­selves; they sim­ply helped “float” them, orga­niz­ing their sale on the New York Stock Exchange. The actu­al bond­hold­ers were most­ly small investors, whose dis­persed nature made them much more prone to coor­di­na­tion prob­lems and thus con­sid­er­ably less pow­er­ful than the monop­o­lis­tic under­writ­ing banks.

As a result of the spec­u­la­tive nature of bond finance and the rel­a­tive pow­er­less­ness of small bond­hold­ers, inter­na­tion­al lend­ing to for­eign gov­ern­ments – the most impor­tant form of cap­i­tal export for most of this peri­od – tend­ed to expose retail investors to a recur­ring risk of bank­rupt­cy or repu­di­a­tion, and sov­er­eign default remained a wide­spread phe­nom­e­non through­out this peri­od. In the first inter­na­tion­al debt cri­sis of the 1820s, vir­tu­al­ly all of the new­ly inde­pen­dent Latin Amer­i­can bor­row­ers and sev­er­al Mediter­ranean coun­tries sus­pend­ed pay­ments on their for­eign debts, main­tain­ing uni­lat­er­al mora­to­ri­ums on inter­est ser­vice that some­times extend­ed for up to three decades (Greece’s first default of 1826 even last­ed over half a cen­tu­ry!). The eco­nom­ic his­to­ri­an Car­los Marichal writes that “default was not only inevitable but also vir­tu­al­ly irre­versible” dur­ing the 1820s: “Despite repeat­ed efforts by envoys of Euro­pean bond­hold­ers to recov­er their monies, all gov­ern­ments (with the excep­tion of Brazil) sys­tem­at­i­cal­ly refused to resume pay­ments.”18

Dur­ing the cri­sis of the 1870s, a sim­i­lar wave of sov­er­eign defaults crip­pled many a hap­less retail investor on the Lon­don Stock Exchange. A large num­ber of Latin Amer­i­can and Euro­pean gov­ern­ments either sus­pend­ed pay­ments or reduced inter­est ser­vice on their out­stand­ing oblig­a­tions, leav­ing 54 per­cent of bonds issued in Lon­don in arrears by 1883.19 Fur­ther sov­er­eign bank­rupt­cies fol­lowed dur­ing the cri­sis of the 1890s, with Argentina’s infa­mous default near­ly bring­ing down the mighty Bar­ings Bank of Lon­don and trig­ger­ing the Wall Street Pan­ic of 1893. Greece default­ed in the sub­se­quent finan­cial tur­moil, as did Por­tu­gal, which uni­lat­er­al­ly reduced its inter­est ser­vice, while Spain and Ser­bia both teetered on the brink of insol­ven­cy. Sev­er­al small­er coun­tries in Latin Amer­i­ca and the Caribbean also sus­pend­ed pay­ments.20

Creditor State Intervention

How, then, did the impe­ri­al­ist pow­ers respond to these recur­ring inter­na­tion­al debt crises and the reg­u­lar episodes of sov­er­eign default they engen­dered? Beside exert­ing diplo­mat­ic pres­sure on the debtor states’ gov­ern­ments, which was the least cost­ly and there­fore favored response, cred­i­tor states could ulti­mate­ly resort to three dif­fer­ent types of impe­ri­al­ist inter­ven­tion to safe­guard the for­eign invest­ments of their nation­al sub­jects: inter­na­tion­al finan­cial con­trol; out­right mil­i­tary occu­pa­tion; and gun­boat diplo­ma­cy. While such cred­i­tor state inter­ven­tion was by no means uni­ver­sal dur­ing the era of clas­si­cal impe­ri­al­ism – indeed, in most cas­es sov­er­eign defaults actu­al­ly went unpun­ished – one study has found that default­ing gov­ern­ments faced at least a 30 per­cent chance of being sub­ject­ed to such “super-sanc­tions.”21

Promi­nent exam­ples of the first type of cred­i­tor inven­tion include the estab­lish­ment of the Inter­na­tion­al Finan­cial Com­mis­sion in Greece, as well as its pre­de­ces­sors in Turkey (the Ottoman Pub­lic Debt Admin­is­tra­tion) and Egypt (the Caisse de la Dette Publique), which were ana­lyzed at length by Rosa Lux­em­burg in her chap­ter on inter­na­tion­al loans in The Accu­mu­la­tion of Cap­i­tal. In each of these cas­es, the rep­re­sen­ta­tives of cred­i­tor states, issu­ing banks and/or pri­vate bond­hold­ers assumed direct admin­is­tra­tive con­trol over tax col­lec­tion and pub­lic debt man­age­ment in order to ensure max­i­mum returns for Euro­pean investors. The Ottoman Pub­lic Debt Admin­is­tra­tion, for instance, con­trolled about a third of the Ottoman Empire’s total state rev­enues between 1881 and 1914.22 The state tobac­co monop­oly, one of the Empire’s main sources of rev­enue, was farmed out to a com­pa­ny found­ed by a con­sor­tium of Euro­pean cred­i­tor banks. As Edgar Vin­cent, rep­re­sen­ta­tive of British and Dutch bond­hold­ers on the OPDA coun­cil, boast­ed: “there is no instance in which pow­ers so extend­ed have been grant­ed to a for­eign orga­ni­za­tion in a sov­er­eign state.”23

The sec­ond type of impe­ri­al­ist inter­ven­tion – out­right mil­i­tary occu­pa­tion – was less com­mon but nonethe­less an impor­tant ulti­mate recourse for the lead­ing cred­i­tor pow­ers, espe­cial­ly Britain and France. In Egypt, for instance, the Fran­co-British regime of finan­cial con­trol enforced punc­tu­al debt ser­vice for some time, but “the pay­ment had vir­tu­al­ly to be flogged out of the impov­er­ished peas­antry.”24 The resul­tant pop­u­lar dis­con­tent fed into the ‘Ura­bi revolt of 1879-82, which cul­mi­nat­ed in a bloody anti-impe­ri­al­ist riot in Alexan­dria in 1882 in which sev­er­al British sub­jects were killed. In response, Britain sum­mar­i­ly invad­ed Egypt and incor­po­rat­ed the for­mer Ottoman province as a pro­tec­torate into its own Empire. While his­to­ri­ans have since point­ed out that bond­hold­er inter­ests were by no means the only con­sid­er­a­tion – the need to secure access to the Suez Canal and intim­i­date the bud­ding nation­al­ist move­ment in Ire­land also fea­tur­ing into the deci­sion to inter­vene – the Egypt­ian debt cri­sis did pro­vide a use­ful pre­text for the British gov­ern­ment to expand its sphere of influ­ence in the east­ern Mediter­ranean and estab­lish con­trol over the for­mer crown jew­el of the Ottoman Empire.

Final­ly, the third type of cred­i­tor inter­ven­tion – gun­boat diplo­ma­cy – involved the use of the impe­ri­al­ist pow­ers’ mar­itime might in order to com­pel non-com­pli­ant bor­row­ers to repay. The most promi­nent exam­ple of this method was undoubt­ed­ly the cred­i­tor response to the Venezue­lan cri­sis of 1902–03, dur­ing which the British, Ger­man, and Ital­ian gov­ern­ments answered Pres­i­dent Cipri­ano Castro’s refusal to hon­or his for­eign oblig­a­tions to Euro­pean investors by dis­patch­ing their gun­boats, blockad­ing Venezuela’s main ports, shelling its naval defens­es, and occu­py­ing its cus­tom hous­es to exact com­pen­sa­tion for dam­ages done dur­ing the pre­ced­ing rev­o­lu­tion and civ­il war. After sev­er­al months of mount­ing inter­na­tion­al pres­sure, Cas­tro final­ly relent­ed and agreed to set­tle with his for­eign claimants at The Hague Tri­bunal.

This Euro­pean show of force in Venezuela famous­ly led to the pro­mul­ga­tion of the Roo­sevelt corol­lary to the Mon­roe doc­trine, in which the U.S. gov­ern­ment claimed for itself a monop­oly on the enforce­ment of for­eign debt con­tracts in the West­ern hemi­sphere, effec­tive­ly assum­ing the role of an “inter­na­tion­al police pow­er” in its own “back­yard.” This move was aimed specif­i­cal­ly at fore­stalling fur­ther Euro­pean inter­ven­tions in the region, which the U.S. gov­ern­ment feared might dis­ad­van­tage Amer­i­can investors vis-à-vis their Euro­pean coun­ter­parts. The Roo­sevelt Corol­lary thus rep­re­sents a strik­ing exam­ple of the cen­tral­i­ty of finan­cial inter­ests – and of sov­er­eign debt enforce­ment more specif­i­cal­ly – in the com­pet­i­tive games between being played out between the impe­ri­al­ist pow­ers around the turn of the 20th cen­tu­ry.

Latter-Day Gunboat Diplomacy?

How do these his­tor­i­cal pat­terns of cred­i­tor inter­ven­tion in sov­er­eign debt crises – the estab­lish­ment of inter­na­tion­al finan­cial con­trol, for­eign occu­pa­tion and gun­boat diplo­ma­cy – com­pare to those of the neolib­er­al peri­od? First of all, it is clear that cred­i­tors’ enforce­ment meth­ods have evolved in a num­ber of impor­tant respects, shift­ing from a reliance on the afore­men­tioned “super-sanc­tions” towards less overt forms of finan­cial sub­ju­ga­tion that have come to be known euphemisti­cal­ly under the rubric of “inter­na­tion­al cri­sis man­age­ment.” In this respect, Varo­ufakis’ polem­i­cal invo­ca­tion of the Troika’s “lat­ter-day gun­boat diplo­ma­cy” actu­al­ly miss­es the mark in ana­lyt­i­cal terms, for it is pre­cise­ly the absence of mil­i­tary coer­cion that is the most strik­ing fea­ture of the con­tem­po­rary turn towards debtor com­pli­ance.

Of course this is not to say that the use of force as such is no longer an impor­tant aspect of West­ern impe­ri­al­ism; just con­sid­er the U.S.-led wars in Iraq and Afghanistan, the NATO inter­ven­tions in the for­mer Yugoslavia and Libya, or the many proxy con­flicts cur­rent­ly being played out from Syr­ia and the Crimea to the Kore­an penin­su­la. There is no doubt, either, that the over­whelm­ing fire­pow­er and world­wide reach of the U.S. mil­i­tary and intel­li­gence ser­vices remain foun­da­tion­al to the Unit­ed States’ sta­tus as the world’s only real super­pow­er: from its 800+ for­eign mil­i­tary bases to its illic­it CIA deten­tion cen­ters, and from the hun­dreds of thou­sands of active duty troops sta­tioned in near­ly 150 for­eign coun­tries to its glob­al­ly mobile fleet of air­craft car­ri­ers and remote-con­trolled drones, the Unit­ed States’ his­tor­i­cal­ly unri­valed mil­i­tary might clear­ly remains the ulti­mate foun­da­tion of its glob­al impe­ri­al­ist aspi­ra­tions.

When it comes to inter­na­tion­al finance, how­ev­er, the enforce­ment of cross-bor­der debt con­tracts today is a remark­ably “peace­ful” affair, gen­er­al­ly work­ing in much sub­tler ways than in the clas­si­cal impe­ri­al­ist era. The real con­ti­nu­ity in terms of impe­ri­al­ist meth­ods lies not in the cred­i­tors’ use of “lat­ter-day gun­boats,” but in their suc­cess­ful insti­tu­tion­al­iza­tion of inter­na­tion­al finan­cial con­trol. In fact, one could make a plau­si­ble case that the Ottoman Pub­lic Debt Admin­is­tra­tion – or its 19th-cen­tu­ry coun­ter­parts in coun­tries like Egypt, Tunisia, Ser­bia, Greece and Chi­na – was an ear­ly fore­run­ner of the con­tem­po­rary IMF Stand-By Arrange­ment and World Bank Struc­tur­al Adjust­ment Pro­gram.

In a piece on “the colo­nial ori­gins of the Greek bailout,” his­to­ri­an Jamie Mar­tin points out that the resem­blance is more than just metaphor­i­cal. “The first time that an inter­na­tion­al orga­ni­za­tion over­saw a pro­gram of aus­ter­i­ty designed to win the con­fi­dence of for­eign cred­i­tors,” he writes, refer­ring to Austria’s expe­ri­ence with hyper­in­fla­tion and finan­cial insta­bil­i­ty in the 1921, “it was pre­cise­ly the expe­ri­ence of for­eign finan­cial con­trol in Egypt, and in oth­er ‘debt colonies’ like it, that pro­vid­ed a mod­el for how that pro­gram should be designed.”25 In the Aus­tri­an case, the risk of finan­cial con­ta­gion towards the main Euro­pean cred­i­tor coun­tries even­tu­al­ly moved the League of Nations to inter­vene, set­ting out to estab­lish a form of exter­nal super­vi­sion over the Aus­tri­an finances. As the League’s tech­no­crat­ic offi­cials began cob­bling togeth­er a pro­gram of eco­nom­ic sta­bi­liza­tion, they looked to the only pre­vi­ous expe­ri­ence that West­ern gov­ern­ments had in admin­is­ter­ing the finances of a cri­sis-strick­en debtor state: that of inter­na­tion­al finan­cial con­trol in (semi-)colonial coun­tries like Turkey, Egypt, and Greece.

In his research, Mar­tin has found that “League offi­cials stud­ied these mech­a­nisms of debt enforce­ment and used them as blue­prints for Aus­tria.” This inter­war expe­ri­ence in Cen­tral Europe in turn “had a long after­life, pro­vid­ing an impor­tant source of expe­ri­ence and exper­tise for the Inter­na­tion­al Mon­e­tary Fund” that was estab­lished after World War II.26 More than any­thing else, it was the cre­ation of the IMF – and, more recent­ly, its rad­i­cal neolib­er­al­iza­tion dur­ing the inter­na­tion­al debt cri­sis of the 1980s – that final­ly served to entrench the defense of cred­i­tor inter­ests at the inter­na­tion­al insti­tu­tion­al lev­el, pro­vid­ing an extreme­ly effec­tive back­stop to the loom­ing threat of sov­er­eign default. If, today, a for­eign gov­ern­ment sud­den­ly enters into stormy waters, inter­na­tion­al finan­cial inter­ven­tion is vir­tu­al­ly guar­an­teed – any­where, any­time – in the form of an IMF Stand-By Arrange­ment, or an emer­gency bailout loan under strict pol­i­cy con­di­tion­al­i­ty geared towards keep­ing the dis­tressed bor­row­er sol­vent while squeez­ing out the max­i­mum amount of domes­tic rev­enue for for­eign debt ser­vic­ing.

Limits of the Classical Theories

The neolib­er­al era there­fore shows both a set of strik­ing sim­i­lar­i­ties to and a num­ber of impor­tant dif­fer­ences from the clas­si­cal impe­ri­al­ist era. Just as a cen­tu­ry ago, con­tem­po­rary cap­i­tal­ism is fun­da­men­tal­ly char­ac­ter­ized by the ascen­dan­cy of finance and the increas­ing­ly con­cen­trat­ed and cen­tral­ized nature of inter­na­tion­al cred­it mar­kets. Unlike in Hilferding’s time, how­ev­er, this con­tem­po­rary form of finan­cial­iza­tion has not led to the type of close per­me­ation with indus­try that the orig­i­nal con­cept of “finance cap­i­tal” was meant to cap­ture. Bankers and indus­tri­al­ists also have not formed the kind of for­mal trusts and car­tels that char­ac­ter­ized the U.S. and Ger­man economies of the late 19th and ear­ly 20th cen­turies. Despite the active par­tic­i­pa­tion of sev­er­al Gold­man Sachs alum­ni in the Trump admin­is­tra­tion, Wall Street has also opposed the type of pro­tec­tion­ist mea­sures that pre­dom­i­nat­ed in the pre- and inter­war peri­od.

Most impor­tant­ly, how­ev­er, the rise of finance today has not led to any explic­it “par­ti­tion­ing” of for­eign mar­kets or for­eign ter­ri­to­ries by the dom­i­nant cap­i­tal­ist pow­ers. Indeed, notwith­stand­ing a few promi­nent but iso­lat­ed excep­tions, mil­i­tary occu­pa­tion and the for­mal incor­po­ra­tion of for­eign ter­ri­to­ries into the met­ro­pol­i­tan heart­land have large­ly ceased to be impor­tant fac­tors in con­tem­po­rary impe­ri­al­ism. On this score, Hardt and Negri were not entire­ly wrong to iden­ti­fy a more gen­er­al, if still uneven trend towards the de-ter­ri­to­ri­al­iza­tion of Empire in recent decades – even if they clear­ly over­stat­ed their argu­ment about the unrav­el­ling of the nation-state.27 In The New Impe­ri­al­ism, David Har­vey – build­ing on the work of Gio­van­ni Arrighi – sim­i­lar­ly empha­sizes the grow­ing impor­tance of a specif­i­cal­ly cap­i­tal­ist log­ic of pow­er; one that fun­da­men­tal­ly con­sists of the “mol­e­c­u­lar” or “cap­il­lary” process­es of cap­i­tal flow, which he explic­it­ly oppos­es to the ter­ri­to­r­i­al log­ic of pow­er that under­pinned the old impe­ri­al­ism.

Unsur­pris­ing­ly, per­haps, the clas­si­cal the­o­rists large­ly failed to fore­see these devel­op­ments. In fact, with the ben­e­fit of hind­sight, we can iden­ti­fy at least two gen­er­al lim­its to the orig­i­nal Marx­ist accounts of impe­ri­al­ism. First, they gen­er­al­ly stressed the more overt and “instru­men­tal­ist” face of the phe­nom­e­non – notably the use of mil­i­tary force and the dri­ve towards ter­ri­to­r­i­al con­quest – at the expense of its more sub­tle struc­tur­al man­i­fes­ta­tions. The fail­ure to con­sid­er that the inter­na­tion­al pol­i­tics of dis­pos­ses­sion might also oper­ate through less vis­i­ble but arguably even more pow­er­ful mar­ket-based or insti­tu­tion­al mech­a­nisms left the clas­si­cal Marx­ist the­o­ries ill-equipped to account for the ris­ing impor­tance of these less vis­i­ble forms of impe­ri­al­ist pow­er in the post­colo­nial era. In this light, we clear­ly need to revamp our the­o­ret­i­cal frame­works to be able cap­ture the some­what less obvi­ous but much more deeply entrenched log­ic of finan­cial sub­ju­ga­tion under neolib­er­al­ism.

Today, with the res­ur­rec­tion of high­ly con­cen­trat­ed glob­al finan­cial mar­kets and the increas­ing­ly impor­tant role of cen­tral banks, region­al orga­ni­za­tions and inter­na­tion­al finan­cial insti­tu­tions in the man­age­ment of sov­er­eign debt crises, the “non-vio­lent” enforce­ment mech­a­nisms of mar­ket dis­ci­pline and con­di­tion­al emer­gency lend­ing have become much stronger and much more impor­tant than ever before. In this light, Har­vey is right to argue that out­right mil­i­tary inter­ven­tions are ulti­mate­ly but “the tip of the impe­ri­al­ist ice­berg.”28 Today, the cred­i­tors’ pre­ferred out­come of full debt repay­ment is achieved much more effec­tive­ly than it ever was dur­ing the clas­si­cal impe­ri­al­ist era, with­out any of the asso­ci­at­ed saber-rat­tling. Indeed, there has been a strik­ing decline in the inci­dence of non-pay­ment dur­ing the neolib­er­al era, with the share of world pub­lic debt in a state of default falling to a his­toric low of 0.2 per­cent between 2010 and 2015, even as the glob­al finan­cial cri­sis shook the pub­lic finances of the advanced cap­i­tal­ist states to their very core and brought the Euro­zone per­ilous­ly close to dis­in­te­gra­tion.

The sec­ond impor­tant lim­it to the clas­si­cal the­o­ries was their appar­ent inabil­i­ty to rec­og­nize the pos­si­bil­i­ty of a new phase of cap­i­tal­ist devel­op­ment beyond clas­si­cal impe­ri­al­ism. The rea­son for this seems to be that Lux­em­burg, Hil­fer­d­ing, Bukharin and Lenin were all very keen to prove that ear­ly 20th-cen­tu­ry cap­i­tal­ism, beset on all sides by debil­i­tat­ing inter­nal con­tra­dic­tions and insu­per­a­ble cri­sis ten­den­cies, was on its last legs, and that impe­ri­al­ism rep­re­sent­ed its final con­vul­sions. The system’s steady demise dur­ing this “mori­bund” monop­o­list phase would pre­pare the ground for a pro­le­tar­i­an social rev­o­lu­tion, which, when com­bined with the con­scious action of the work­ing class, would ulti­mate­ly lead to the estab­lish­ment of social­ism. Each of the clas­si­cal the­o­rists thus pro­posed their own spe­cif­ic analy­sis of cri­sis for­ma­tion in order to account for the prospect of cap­i­tal­ist col­lapse, which seemed to them increas­ing­ly like­ly. The trick was sim­ply to iden­ti­fy the under­ly­ing sources of this deca­dence (under­con­sump­tion in Lux­em­burg, over­pro­duc­tion in Bukharin, dis­pro­por­tion­al­i­ty in Hil­fer­d­ing) and there­by prove that the his­tor­i­cal process of cap­i­tal­ist devel­op­ment had final­ly cul­mi­nat­ed in its high­est stage, and that the work­ing class­es of Europe now stood on the eve of social rev­o­lu­tion.

It was pre­cise­ly here that the clas­si­cal Marx­ist read­ings of impe­ri­al­ism reached their most impor­tant out­er lim­its. By root­ing their analy­ses firm­ly with­in an over­ly lin­ear cri­sis-the­o­ret­i­cal frame­work that con­sid­ered impe­ri­al­ism prin­ci­pal­ly from the per­spec­tive of the old cap­i­tal­ist states and impe­ri­al­ist pow­ers them­selves, they end­ed up under­es­ti­mat­ing not only glob­al capitalism’s prospects for renew­al, and hence its capac­i­ty to regen­er­ate itself under the aegis of a new impe­r­i­al super­pow­er after the “Euro­pean civ­il war” of 1914–45, but also the endur­ing nature of the under­ly­ing rela­tions of dom­i­na­tion between the advanced cap­i­tal­ist core and the emerg­ing glob­al periph­ery. As Thomas Sankara so pow­er­ful­ly point­ed out dur­ing the Third World debt cri­sis of the 1980s, these asym­met­ric pow­er rela­tions con­tin­ue to bedev­il the post­colo­nial states that emerged from the anti-impe­ri­al­ist strug­gles of the 20th cen­tu­ry.

Anchor­ing our think­ing of impe­ri­al­ism along anoth­er sub­ter­ranean tra­di­tion, which con­ceives of the phe­nom­e­non not from the per­spec­tive of the impe­ri­al­ist state, by way of a the­o­ry of cri­sis for­ma­tion and inevitable cap­i­tal­ist col­lapse, but rather from the per­spec­tive of the post­colo­nial state itself, by way of a the­o­ry of state finance and the pow­er of cap­i­tal, may help us avoid some of these con­cep­tu­al apo­r­ias and point towards a more effec­tive anti-impe­ri­al­ist pol­i­tics; one that stops us from con­flat­ing strug­gles for eman­ci­pa­tion and lib­er­a­tion with a par­tic­u­lar state or gov­ern­ment, and that allows us instead to con­ceive of impe­ri­al­ism as a set of struc­tur­al depen­den­cies and asym­met­ric pow­er rela­tions between states that are inter­me­di­at­ed in com­plex ways by the “de-ter­ri­to­r­i­al” log­ic of glob­al finan­cial mar­kets; the active finan­cial inter­ven­tion­ism of cred­i­tors states, cen­tral banks and inter­na­tion­al orga­ni­za­tions; and the bridg­ing role of oppor­tunis­tic com­prador elites inside the debtor coun­tries them­selves.

Imperialism and the State

In his intro­duc­tion to the 2011 edi­tion of Hobson’s Impe­ri­al­ism: A Study, Nathaniel Mehr right­ly points out the irony of the fact that “some of the most impor­tant com­po­nents of the mod­ern impe­ri­al­ist structure…take the form of for­mal­ly con­sen­su­al inter­na­tion­al agree­ments.”29 This rais­es the ques­tion why so many post­colo­nial and periph­er­al states would “con­sen­su­al­ly” sign up to inter­na­tion­al agree­ments that active­ly under­mine their nation­al sov­er­eign­ty and eco­nom­ic auton­o­my. The short answer is that many of these agree­ments were con­clud­ed under eco­nom­ic duress, in the con­text of a high­ly asym­met­ric glob­al pow­er struc­ture, and were often active­ly spon­sored by local elites inside these devel­op­ing coun­tries them­selves; elites who, unlike most of their work­ing-class com­pa­tri­ots, often stood to ben­e­fit from deep­er eco­nom­ic inte­gra­tion into the cap­i­tal­ist world mar­ket. The neolib­er­al reforms of the Wash­ing­ton Con­sen­sus, for instance, were large­ly imposed by the U.S.-dominated Bret­ton Woods insti­tu­tions in the con­text of the inter­na­tion­al debt crises of the 1980s and 1990s, with the active col­lu­sion of local elites.

The unsev­ered umbil­i­cal cord that leaves large swathes of the Glob­al South eco­nom­i­cal­ly reliant on their old colo­nial pow­ers, even after for­mal­ly attain­ing nation­al inde­pen­dence, is the struc­tur­al depen­dence of these periph­er­al states on for­eign cred­it and invest­ment, which has long been pro­vid­ed to them by pri­vate banks, inter­na­tion­al investors and finan­cial insti­tu­tions in the advanced cap­i­tal­ist coun­tries. Sub­ject­ing the nature of this struc­tur­al depen­dence to clos­er the­o­ret­i­cal and empir­i­cal scruti­ny may there­fore allow us to approach the prob­lems faced by “the new debt colonies” from a some­what dif­fer­ent angle, enabling us to bet­ter under­stand the more sub­tle con­tem­po­rary forms of finan­cial sub­ju­ga­tion oper­at­ing at the struc­tur­al and insti­tu­tion­al lev­el that serve to repro­duce these deeply entrenched inter­na­tion­al pow­er asym­me­tries over time, even in the absence of ter­ri­to­r­i­al con­trol or out­right mil­i­tary inter­ven­tion.

An inquiry into this depen­dence on for­eign cred­it and invest­ment ulti­mate­ly leads us back to the prob­lem of the cap­i­tal­ist state. Unfor­tu­nate­ly, since Marx did not live to write the book on the state that he had orig­i­nal­ly envi­sioned as part of his six-vol­ume out­line for Cap­i­tal, and since post-war Marx­ist state the­o­ry – both in Miliband’s “instru­men­tal­ist” approach and in Poulantzas’ “struc­tural­ist” frame­work – gen­er­al­ly skipped over the key ques­tion of pub­lic finance, there remains a sub­stan­tial gap in Marx­ist the­o­riz­ing when it comes to the cen­tral­i­ty of the state-finance nexus to the repro­duc­tion of cap­i­tal­ist and impe­ri­al­ist pow­er rela­tions more gen­er­al­ly. Nev­er­the­less, Marx him­self did leave a num­ber of scat­tered ref­er­ences on the state, espe­cial­ly in his treat­ment of prim­i­tive accu­mu­la­tion in Vol­ume I of Cap­i­tal, that may pro­vide us with a use­ful start­ing point for a state-the­o­ret­i­cal approach to the study of impe­ri­al­ism today.

The first point to note is that, for Marx, the phe­nom­e­na of colo­nial­ism and the pub­lic debt were already intri­cate­ly inter­twined as two of the prin­ci­pal levers of prim­i­tive accu­mu­la­tion that helped set in motion the process of cap­i­tal­ist devel­op­ment. In his chap­ter on “The Gen­e­sis of the Indus­tri­al Cap­i­tal­ist,” Marx demon­strates how the for­mer “ripened trade and nav­i­ga­tion as in a hot house,” while the lat­ter led to “the alien­ation of the state” and gave rise to an “aris­toc­ra­cy of finance” that com­mand­ed a great deal of polit­i­cal pow­er.30 Colo­nial­ism and the pub­lic debt, then, were two of the cen­tral nodes in the expand­ing web of cap­i­tal­ist con­trol, with­out which there would have been no cap­i­tal­ist trade or cap­i­tal­ist finance. It is pre­cise­ly the sub­ju­ga­tion of the Glob­al South to the emerg­ing cap­i­tal­ist states of Europe, and the simul­ta­ne­ous sub­ju­ga­tion of those Euro­pean states to their own pri­vate financiers, that – along with the sub­ju­ga­tion of peas­ants, women, slaves and non-human nature – laid the foun­da­tions for the devel­op­ment of mod­ern cap­i­tal­ist indus­try, long before the rise of the fac­to­ry sys­tem and the urban pro­le­tari­at.

The Structural Dependence of the State

But, and this is the sec­ond key point, the foun­da­tion­al process of “prim­i­tive accu­mu­la­tion” can­not sim­ply be con­fined to a dis­tant pre-cap­i­tal­ist past. As Rosa Lux­em­burg so impor­tant­ly empha­sized in The Accu­mu­la­tion of Cap­i­tal, “this process is still going on.”31 David Har­vey, of course, famous­ly revived this obser­va­tion by replac­ing Marx’s “so-called prim­i­tive accu­mu­la­tion” with the con­cept of “accu­mu­la­tion by dis­pos­ses­sion,” which has become increas­ing­ly impor­tant with the rise of neolib­er­al­ism and has been foun­da­tion­al to the new impe­ri­al­ism of the post-1973 peri­od. Sil­via Fed­eri­ci makes a very sim­i­lar point in her work on the new enclo­sures of com­mon farm­lands in West Africa through the World Bank’s struc­tur­al adjust­ment pro­grams dur­ing the Third World debt cri­sis of the 1980s. Seen from this per­spec­tive, the nation­al debt remains one of the prin­ci­pal levers of cap­i­tal­ist dis­pos­ses­sion, even more so in the neolib­er­al era, which has been char­ac­ter­ized by the unleash­ing of glob­al finance and ris­ing lev­els of pub­lic debt.

In one of the few Marx­ist treat­ments of pub­lic finance, The Fis­cal Cri­sis of the State (1973), James O’Connor use­ful­ly high­light­ed the con­tra­dic­to­ry nature of the sys­tem of gov­ern­ment loans, at once enabling and con­strain­ing state author­i­ty. On the one hand, O’Connor point­ed out, pub­lic cred­it endows the trea­sury with spend­ing pow­er that it would not oth­er­wise have had, while on the oth­er it ren­ders the state increas­ing­ly depen­dent on a nar­row sub­group of wealthy financiers who com­mand suf­fi­cient cap­i­tal be able to advance the req­ui­site funds.32 Observ­ing the same para­dox, Ernest Man­del referred to the pub­lic debt as “the gold­en chains of cap­i­tal,” tying the state to the big banks and vice ver­sa:

No gov­ern­ment could last more than a month with­out hav­ing to knock on the door of the banks in order to pay its cur­rent expens­es. If the banks were to refuse, the gov­ern­ment would go bank­rupt. The ori­gins of this phe­nom­e­non are twofold. Tax­es don’t enter the cof­fers every day; receipts are con­cen­trat­ed in one peri­od of the year while expens­es are con­tin­u­ous. That is how the short-term pub­lic debt aris­es … But there is anoth­er prob­lem – a much more impor­tant one. All mod­ern cap­i­tal­ist states spend more than they receive. That is the long-term pub­lic debt for which banks and oth­er finan­cial estab­lish­ments can most eas­i­ly advance mon­ey, at heavy inter­est. There­in lies a direct and imme­di­ate con­nec­tion, a dai­ly link, between the state and big busi­ness.33

All cap­i­tal­ist states, in the end, are struc­tural­ly depen­dent on the pro­vi­sion of pri­vate cred­it to be able to repro­duce them­selves and car­ry out their key social, polit­i­cal and eco­nom­ic func­tions over time. With­out access to cred­it, for instance, states would his­tor­i­cal­ly not have been able to raise armies and wage war as effec­tive­ly as they did; indeed, the capac­i­ty to bor­row large sums of mon­ey at afford­able inter­est rates was foun­da­tion­al to the emer­gence of pro­fes­sion­al armies and mod­ern war­fare, which in turn were foun­da­tion­al to the com­pet­i­tive advan­tage and colo­nial ven­tures of the emerg­ing cap­i­tal­ist states. Nor would con­tem­po­rary gov­ern­ments have been able to engage in the type of Key­ne­sian deficit spend­ing that under­pinned the rapid growth of the post­war peri­od and that allowed for the cre­ation of com­plex bureau­crat­ic wel­fare states, where pub­lic expen­di­tures do not always coin­cide with tax col­lec­tion. Access to cred­it, then, allows not only for “tem­po­ral smooth­ing” between alter­nat­ing peri­ods of expen­di­ture and income, but also enables the state to engage in more long-term pub­lic invest­ments – in areas such as infra­struc­ture and edu­ca­tion – that do not yield imme­di­ate returns and for which the state does not cur­rent­ly have suf­fi­cient resources on hand.

The obverse side of the coin, how­ev­er, is that a ris­ing pub­lic debt tends to con­strain the state’s rel­a­tive auton­o­my from its pri­vate financiers, impos­ing cer­tain lim­its on the room for maneu­ver avail­able to gov­ern­ment. In the case of the advanced cap­i­tal­ist states, this depen­dence is most­ly on their own cred­i­tor class, as the lion’s share of their nation­al debt tends to be held domes­ti­cal­ly. In the case of the younger cap­i­tal­ist states, how­ev­er, where finan­cial mar­kets are not as well devel­oped, this depen­dence has long tend­ed to be on for­eign cred­i­tors, adding an addi­tion­al lay­er of inter­na­tion­al depen­dence that forms the bedrock of the asym­met­ric pow­er rela­tions between cred­i­tor states and debtor states in the glob­al polit­i­cal econ­o­my. It is this struc­tur­al depen­dence on for­eign sources of cred­it that com­pels periph­er­al bor­row­ers to hon­or their inter­na­tion­al oblig­a­tions and live up to the let­ter of their finan­cial com­mit­ments, lest they suf­fer the crip­pling eco­nom­ic con­se­quences of a com­plete cut-off of for­eign financ­ing, in the absence of which their prospects of eco­nom­ic devel­op­ment would be severe­ly con­strained.

Of course, there are many more lay­ers of com­plex­i­ty to be con­sid­ered here – most impor­tant­ly, we have not even begun to broach the cru­cial ques­tions of domes­tic class rela­tions and the com­prador phe­nom­e­non inside the post­colo­nial and periph­er­al debtor coun­tries them­selves, which con­tin­ue to be key fac­tors behind the inter­na­tion­al pol­i­tics of dis­pos­ses­sion today. The main point, how­ev­er, should be clear: there are good rea­sons to approach some of the con­tem­po­rary prob­lems suf­fered by the “new debt colonies” from a state-the­o­ret­i­cal per­spec­tive. Only by tak­ing a clos­er look at the more sub­tle forms of cred­i­tor pow­er that are exert­ed through the debtors’ acute depen­dence on glob­al finan­cial mar­kets and inter­na­tion­al finan­cial insti­tu­tions can we begin to under­stand the strik­ing con­trast between, for instance, Greece’s repeat­ed defaults dur­ing the era of gun­boat diplo­ma­cy, and its firm insis­tence on full debt ser­vic­ing today.

Beyond the Politics of National Liberation

This, then, would appear to be the crux of finan­cial impe­ri­al­ism dur­ing the neolib­er­al era. It is ulti­mate­ly the depen­dence of post­colo­nial and periph­er­al states on for­eign cred­it and invest­ment – a depen­dence that has grown increas­ing­ly acute with the glob­al­iza­tion and finan­cial­iza­tion of the cap­i­tal­ist world econ­o­my since the 1980s – that endows the big banks, for­eign investors and finan­cial insti­tu­tions with immense struc­tur­al pow­er over their vul­ner­a­ble sov­er­eign bor­row­ers. Under con­di­tions of eco­nom­ic duress, these for­eign cred­i­tors can push through even the most bru­tal­ly exploita­tive aus­ter­i­ty mea­sures, neolib­er­al reforms and pri­va­ti­za­tion pro­grams – ensur­ing full repay­ment for cred­i­tors while pry­ing open new mar­kets for glob­al cap­i­tal – with­out so much as a hint of phys­i­cal vio­lence. For the debtor coun­tries, the alter­na­tive is to face the debil­i­tat­ing con­se­quences of a for­eign cred­it embar­go and cap­i­tal strike, which – as we saw in the wake of Greece’s anti-aus­ter­i­ty ref­er­en­dum in the sum­mer of 2015 – would risk crip­pling domes­tic indus­tries and have dev­as­tat­ing knock-on effects on the nation­al econ­o­my.

In short, the explo­sive pow­er of finan­cial impe­ri­al­ism today resides not in the gun tur­rets of the cred­i­tors’ war ships, but in the invest­ment port­fo­lios of the pow­er­ful Wall Street banks and the Excel spread­sheets of the odor­less tech­nocrats charged with admin­is­ter­ing fis­cal aus­ter­i­ty and inter­na­tion­al finan­cial con­trol. The clas­si­cal the­o­rists of impe­ri­al­ism were there­fore wrong to believe that finance cap­i­tal, as Hil­fer­d­ing put it, marked “the cli­max of the dic­ta­tor­ship of the mag­nates of cap­i­tal.”34 Speak­ing pure­ly from their own his­tor­i­cal van­tage point, this obser­va­tion made sense. But the clas­si­cal the­o­rists had no idea what was com­ing. Today, the struc­tur­al pow­er of finance has reached pre­vi­ous­ly unimag­in­able heights. If nation­al lib­er­a­tion – i.e., the push for for­mal inde­pen­dence through the cre­ation of a new sov­er­eign state – still seemed to offer a way out of the ter­ri­to­r­i­al dom­i­na­tion of the impe­ri­al­ist pow­ers in Lenin’s time, it clear­ly no longer does so today. The log­ic of impe­ri­al­ist pow­er and the meth­ods of finan­cial sub­ju­ga­tion have changed. So must the strug­gles against it.

The polit­i­cal upshot of all this is that the left urgent­ly needs to stop con­flat­ing strug­gles for pop­u­lar eman­ci­pa­tion and nation­al lib­er­a­tion with a par­tic­u­lar state or gov­ern­ment. In most cas­es, with the notable excep­tion of occu­pied ter­ri­to­ries like Pales­tine and Kur­dis­tan, the ene­my today is no longer a sin­gle colo­nial pow­er, but a much vaster com­plex of struc­tur­al depen­den­cies and asym­met­ric pow­er rela­tions – one that is inter­me­di­at­ed by the glob­al­ized log­ic of finan­cial mar­kets, the unac­count­able rule of cen­tral bankers, the dis­ci­pli­nary role of inter­na­tion­al finan­cial insti­tu­tions, and the bridg­ing func­tion ful­filled by local elites inside the depen­dent periph­er­al states them­selves. This means the left will need to find ways to artic­u­late new strate­gic frame­works and polit­i­cal objec­tives that, while ful­ly sup­port­ing the right to self-deter­mi­na­tion for oppressed peo­ples, must aim to move beyond the state-cen­tric log­ic of nation­al lib­er­a­tion that ani­mat­ed most anti-impe­ri­al­ist inde­pen­dence strug­gles of the recent past.

For instance, while the Amer­i­can left should unequiv­o­cal­ly defend Puer­to Ricans’ right to self-deter­mi­na­tion, it also needs to under­stand that state­hood alone will not help the island’s inhab­i­tants over­come their con­tin­ued eco­nom­ic depen­dence on U.S. cap­i­tal. Sim­i­lar­ly, Greece’s prob­lems will not be resolved sim­ply by leav­ing the euro­zone; the real prob­lem lies in the fact that the coun­try con­tin­ues to depend on its Euro­pean cred­i­tors and inter­na­tion­al investors to keep its own gov­ern­ment and banks going. In the absence of for­eign cred­it, liq­uid­i­ty and invest­ment, Greek cap­i­tal­ism would not be able to repro­duce itself for long. Sim­i­lar­ly, the real prob­lem fac­ing Cat­alo­nia today is not cen­tral rule from Madrid so much as decen­tral­ized rule through inter­na­tion­al finan­cial mar­kets and an entire­ly unac­count­able cen­tral bank. It was not the Span­ish army that crushed the Cata­lan push for inde­pen­dence this time around, even if there was plen­ty of abhor­rent police vio­lence to go around. What real­ly killed the Cata­lan push for inde­pen­dence was the wave of cor­po­rate flight that fol­lowed the ref­er­en­dum and the real­iza­tion among Cata­lan elites that a nom­i­nal­ly inde­pen­dent Cata­lan state would nev­er be able to access cred­it and means of pay­ment so long as inter­na­tion­al investors con­tin­ued to wor­ry about polit­i­cal uncer­tain­ty and the ECB refused to rec­og­nize its sov­er­eign­ty.

What is need­ed today, then, is not just a pro­lif­er­a­tion of new finan­cial­ly depen­dent state appa­ra­tus­es, nor the kind of inward-look­ing social chau­vin­ism or left-nation­al­ism that has recent­ly ani­mat­ed cer­tain seg­ments of the Euro­pean and Amer­i­can left. Rather, what is need­ed is a revamped pop­u­lar inter­na­tion­al­ism that focus­es all its ener­gies on oppos­ing the pol­i­tics of dis­pos­ses­sion and dis­man­tling the root­stock of cap­i­tal­ist impe­ri­alisms both past and present: the struc­tur­al pow­er of finance. In prac­tice, this will require the left to come to terms with the intri­cate and some­what arcane oper­a­tions of glob­al finan­cial mar­kets, cen­tral bank­ing, inter­na­tion­al finan­cial insti­tu­tions and the mon­e­tary sys­tem, and to find rad­i­cal new ways to bring the pri­va­tized process of cred­it and mon­ey cre­ation under demo­c­ra­t­ic con­trol. At the same time, it will also need to involve a real­is­tic reck­on­ing with the lim­its of state pow­er – espe­cial­ly under con­di­tions of glob­al­iza­tion and finan­cial­iza­tion – and of the role of the state in repro­duc­ing cap­i­tal­ist and impe­ri­al­ist pow­er rela­tions more gen­er­al­ly. Indeed, as Syriza’s recent expe­ri­ence in Greece has amply demon­strat­ed, with­out build­ing social pow­er through autonomous pop­u­lar orga­ni­za­tions and endur­ing insti­tu­tions of rad­i­cal democ­ra­cy out­side of the state-finance nexus, the left will be doomed to remain lit­tle more than a bad­ly dressed lack­ey of glob­al cap­i­tal.

Ulti­mate­ly, the only way to begin dis­man­tling impe­ri­al­ist rela­tions of dom­i­na­tion and tru­ly lib­er­ate the new debt colonies from their eco­nom­ic sub­ju­ga­tion is for the work­ing class­es and social move­ments of both the debtor and the cred­i­tor coun­tries to become aware of their shared inter­est in build­ing a uni­fied front against the impo­si­tions of glob­al finance. As Thomas Sankara so cogent­ly put in his famous debt speech at the Orga­ni­za­tion of African Uni­ty con­fer­ence in Addis Aba­ba in 1987, just months before his assas­si­na­tion, “the pop­u­lar mass­es of Europe are not opposed to the pop­u­lar mass­es of Africa. Those who want to exploit Africa are the same ones as those who exploit Europe. We have a com­mon ene­my.” It is high time for the left in the impe­ri­al­ist heart­land to heed those words and begin act­ing upon that fun­da­men­tal real­i­ty.

  1. Jason Hick­el, “Aid in reverse: how poor coun­tries devel­op rich coun­tries,” The Guardian, Jan­u­ary 14, 2017. 

  2. Cit­ed in Peter Spiegel and Ste­fan Wagstyl, “Greece’s Alex­is Tsipras faces Syriza rebel­lion over ‘humil­i­a­tion’,” Finan­cial Times, July 14, 2015. 

  3. J. A. Hob­son, Impe­ri­al­ism: A Study (Not­ting­ham: Spokesman, 2011 [1902]), 119. 

  4. Hob­son, Impe­ri­al­ism, 86. 

  5. David Har­vey, The New Impe­ri­al­ism (Oxford: Oxford Uni­ver­si­ty Press, 2003), 138. 

  6. Cit­ed in Har­vey, The New Impe­ri­al­ism, 137. 

  7. Rosa Lux­em­burg, The Accu­mu­la­tion of Cap­i­tal (Lon­don: Rout­ledge, 2003 [1913]), 401. 

  8. Rudolf Hil­fer­d­ing, Finance Cap­i­tal: A Study of the Lat­est Phase of Cap­i­tal­ist Devel­op­ment. (Lon­don: Rout­ledge and Kegan Paul, 1981 [1910]), 21. 

  9. Hil­fer­d­ing, Finance Cap­i­tal, 226. 

  10. Hil­fer­d­ing, Finance Cap­i­tal, 234. 

  11. Hil­fer­d­ing, Finance Cap­i­tal, 7-8. 

  12. Hil­fer­d­ing, Finance Cap­i­tal, 334. 

  13. Niko­lai Bukharin, Impe­ri­al­ism and World Econ­o­my. (Lon­don: Mar­tin Lawrence, 1929 [1918]), 61. 

  14. Bukharin, Impe­ri­al­ism and World Econ­o­my, 60, 73. 

  15. V. I. Lenin, Impe­ri­al­ism, The High­est Stage of Cap­i­tal­ism: A Pop­u­lar Out­line (New York: Inter­na­tion­al Pub­lish­ers, 1939 [1917]), 11, 13. 

  16. Lenin, Impe­ri­al­ism, 66, 101. 

  17. Marc Flan­dreau and Juan Flo­res, “Bond­hold­ers vs. Bond-Sell­ers? Invest­ment Banks and Con­di­tion­al­i­ty Lend­ing in the Lon­don Mar­ket for For­eign Gov­ern­ment Debt, 1815-1913,” Work­ing Paper 2, (Euro­pean His­tor­i­cal Eco­nom­ics Soci­ety, 2011), 21-22. 

  18. Car­los Marichal, A Cen­tu­ry of Debt Crises in Latin Amer­i­ca (Prince­ton: Prince­ton Uni­ver­si­ty Press, 1989), 43, 55, 67. 

  19. Her­bert Feis, Europe, The World’s Banker: 1870-1914 (New Haven: Yale Uni­ver­si­ty Press, 1930), 105; Marichal, A Cen­tu­ry of Debt Crises in Latin Amer­i­ca, 102; Lux­em­burg, The Accu­mu­la­tion of Cap­i­tal, 405-6. 

  20. Feis, Europe, The World’s Banker, 12. 

  21. Kris James Mitch­en­er and Marc Wei­den­mi­er, “Super­sanc­tions and Sov­er­eign Debt Repay­ment,” Work­ing Paper 11472 (Nation­al Bureau of Eco­nom­ic Research, Cam­bridge, MA, 2005). These find­ings, how­ev­er, have been con­test­ed by oth­er schol­ars. 

  22. Murat Birdal, The Polit­i­cal Econ­o­my of Ottoman Pub­lic Debt: Insol­ven­cy and Euro­pean Finan­cial Con­trol in the Late Nine­teenth Cen­tu­ry (Lon­don: Tau­ris, 2010), 6-7. 

  23. Birdal, The Polit­i­cal Econ­o­my of Ottoman Pub­lic Debt, 84. 

  24. W. H. Wynne, State Insol­ven­cy and For­eign Bond­hold­ers: Select­ed Case His­to­ries of Gov­ern­men­tal For­eign Bond Defaults and Debt Read­just­ments, vol. 2 (Lon­don: Oxford Uni­ver­si­ty Press, 1951), p. 594. 

  25. Jamie Mar­tin, “The Colo­nial Ori­gins of the Greek Bailout,” Impe­r­i­al & Glob­al Forum, July 27, 2015, 

  26. Mar­tin, “The Colo­nial Ori­gins.” For this con­nec­tion between the League of Nations and the IMF, see Louis W. Pauly, The League of Nations and the Fore­shad­ow­ing of the Inter­na­tion­al Mon­e­tary Fund, Essays in Inter­na­tion­al Finance 201, (Prince­ton: Inter­na­tion­al Finance Sec­tion, Prince­ton Uni­ver­si­ty Depart­ment of Eco­nom­ics, 1996). 

  27. Michael Hardt and Anto­nio Negri, Empire (Cam­bridge, MA: Har­vard Uni­ver­si­ty Press, 2000). 

  28. Har­vey, The New Impe­ri­al­ism, 181. 

  29. Nathaniel Mehr, intro­duc­tion to Impe­ri­al­ism: A Study by John A. Hob­son, 37. 

  30. Karl Marx, Cap­i­tal, trans. Ben Fowkes, vol. 1 (Lon­don: Pen­guin, 1990), 919. 

  31. Lux­em­burg, The Accu­mu­la­tion of Cap­i­tal, 350. 

  32. James O’Connor, The Fis­cal Cri­sis of the State (New York: St. Martin’s Press, 1973), 188. 

  33. Ernest Man­del, The Marx­ist The­o­ry of the State (New York: Pathfind­er Press, 1971). 

  34. Hil­fer­d­ing, Finance Cap­i­tal, 370. 

Author of the article

is a Fellow in International Political Economy at the London School of Economics, and the founding editor or ROAR Magazine.