Imperialism and the New Middle Class

S. J. Rutgers

Published: The Class Struggle, vol. 1, no. 4. December 1917. Pages 64-70.
Transcription/Markup: Micah Muer, 2021.

The ever growing productivity of labor combined with a relatively constant standard of living of the workers, means an increasing volume of products in the hands of the Capitalist class. Personal squander by the individual capitalists cannot dispose of these values; in fact, unlimited luxury as displayed in some other periods of history is against the capitalist morals, the accumulation of capital being a fundamental condition for successful competition.

Therefore Capitalism has to expand, has to crush the remnants of other forms of production, has to increase its field of action, has to extend its markets.

Commercial capital strengthened by the robbery of Far Eastern countries, played an important part in the birth of European industrial capitalism and commercial Colonialism continued to play an important part in the turbulent life of this new giant. But at the same time this colonialism fundamentally changed its character. Instead of robbing the wealth of nature in foreign countries and killing the people, the process reversed into robbing the people and killing nature. A period in which the valuable products of tropical regions were "traded" against a worthless piece of mirror or a bottle of the poorest gin, bribing the native chiefs and taking by force whatever was not given up voluntarily was followed by a period of more regular "exchange."

The European industry commenced to dump its cheap products, especially those of the textile industry into the colonies and insisted upon having the natives produce chiefly those products which are of special interest to western "civilization." This not only resulted in greatly destroying the picturesque landscapes by substituting monotonous plantations for a multitude of inland fields and gardens and cheap cotton clothes for the charming products of skillful home industry, but it meant a new form of slavery as well. The introduction of money as a regular feature of economic life, forced upon the native population, if necessary, by the levying of taxes, resulted in a greater amount of misery, exploitation and starvation than in the worst periods of direct colonial plunder. This was the era of free trade in which interference with the local affairs of the colonies was generally restricted to dealings with the native chiefs and adequate protection of commerce, especially in ports and big centers of traffic. This was also the era of starvation in British and other colonies.

Again the character of colonial exploitation had to change. The increasing outpour of commodities into undeveloped countries combined with primitive methods of exploitation of the natives reached a point where these commodities got a soul, became active life organizations, became capital ready to aggressively exploit native labor, coin native blood into gold.

This change came with a change in the character of the commodities exported from Europe.

The production of commodities for consumption in the old capitalist countries soon reached a point of more or less permanent overproduction. Unnecessary to state that at the same time millions were starving none the less for want of all the necessities of life. But production for profit merely considers wants that can be paid for and the workers get only a small part of what they make. Selling to those occupied in more primitive forms of production; agricultural States in Europe or colonies abraod [sic] means exchange for foodstuffs or basic materials for production. Foreign products may help to stimulate luxury and complexity of life and foreign and native primitive people can be educated by missionaries and contact with "civilized" life to use more products of modern industry but the limits are rather narrow. For it would be an absurdity for capital to educate the natives in the colonies and the peasants at home to such a degree of luxury that they could buy largely the good things of life, which would mean higher wages and less profits.

Japan, i. e., the latest achievement of capitalism, did not develop its home market in any extensive way for fear that the low wages would come to a quick end, but embarked at once on a policy of export and imperialism.

Dumping commodities for consumption, such as cheap industrial products and clothes into colonies and agricultural districts, does not give much relief from "over-production" because they yield in return other commodities for consumption, mostly foodstuffs and luxuries and materials for production. But the workers cannot buy foodstuffs, etc., beyond the extent of their wages and an increase of materials for production only aggravates the surplus of commodities.

What to do with this growing surplus, how to invest the accumulating profits? Production for consumption evidently results in disaster and this fact was already demonstrated in the beginning of the last century by terrible crises in periods of about seven to ten years. A few years of prosperity and the capitalist organization of production again suffered a breakdown. Such a condition could not continue without serious revolt. There was only one way out: increased production of means of production, in order to produce again means of production which constitutes another absurdity in the development of capitalism.

Production of tools of production means more workers, more wages, more material, more mining, more miners, but in some form or other it means an ever growing quantity of products. It can bring only a temporary relief.

Building railroads, canals, harborworks, factories, offices, opening new countries by reclamation and irrigation, building new fleets and equipping armies for future conquest, may continue for a considerable length of time, in fact has continued for the last forty or fifty years but it cannot continue forever. A crisis every seven years may be avoided but the crisis after fifty years means a world war, a revolution or both.

Individual squander is no capitalist feature in the sense as it was in the Roman empire and the latter part of Feudalism, but we notice a general "waste" inherent in the system as such, which is far more effective in destroying surplus commodities. I won't repeat the well known elements of wastefulness in the regular process of production and especially of distribution under Capitalism. I only mention two points: First, the enormous waste in foreign investments and foreign enterprises. A great many of the railroads and other colonial experiments do not yield results or only poor results, and in perhaps a majority of the cases profits start only after a "reorganization" at great loss to the investors. This is logical. The main object of the enterprise was to get rid of capital and means of production at a profit. As long as the bankers who float the enterprise and the big manufacturers who are on the inside get at their money, it does not matter whether a few thousands of smaller capitalists are cheated of several millions.

Second, the fabulous development of militarism and war. Militarism to the extent as known to us, and especially this war continuing for years would be impossible if there was not such an excess in productiveness, if it was not to a certain extent desirable from a general capitalist standpoint to destroy and waste values as well as men who produce those values. It therefore is not in accordance with actual conditions to expect that after this war it will take a generation to rebuild and reconstruct "normal" conditions. There may be expected after the necessary readjustments a short stimulus, a short period of "prosperity," a new and more intensive rush for military equipments and another war.

A world peace and a binding agreement to divide the world into permanent spheres of influence is contrary to the character of present day Capitalism, because a "normal" capitalist development is impossible. Only in a mad race for production of means of production to produce again means of production and means to destroy these means of production, can Capitalism maintain itself, now that it has fulfilled its historic task of increased productivity. There is no place under the sun for all the capitalist countries, there is not even sufficient place under the sun for one Capitalist Country unlimited in its expansion. The only hope for the Capitalist system as such is the mutual destruction of each other's products with a chance for the very biggest and most efficient to keep a larger share in the general cataclysm.

Such is the character of Imperialism in peace and in war. And this character dominates all social institutions and all human relations. It means aggression and brutality, it means an utter disregard of human life and human rights, save the right of the strongest: the strong man policy. It puts into control the basic industries, with steel and machinery in their broadest sense leading, and financial capital as its centralized expression. It creates slavery not only of the workers, but of the smaller capitalists and middlemen as well. In fact all so-called independent capitalists become servants of Big Monopolistic Capital ready to be swallowed or crushed if any thought of resistance should enter their servile brains.

This is an important feature of Imperialism: the submission of the average capitalist and the middle classes in general towards Big Monopolistic Capital, the welding together of all of the capitalist interests into one aggressive power expressed by one brutal ideology of "nationalism" and strong-men policy.

To understand this phenomenon more fully, it is necessary to turn to economic changes as the result of concentration and monopolization of capital and industry. The monopoly tends to overcome free competition, one of the pillars of the capitalist system. Free competition is essential for dividing the surplus value amongst the different classes of capitalists who participate in the production and distribution. We know that through the divergencies between price and value, the general surplus value is divided over different industries, etc., each with a different technical development, so as to establish a tendency towards an equal profit-rate for capital. This is brought about by free competition or free distribution of capital, because capital will invest more readily in spheres yielding a greater profit with the result of lowering prices until the establishment of a kind of equilibrium.

The Monopoly, however, restricts artificially the possibility of freely investing money in its particular sphere and enables to take a greater part of the general surplus value through its price policy. This price policy is subject to capitalist limitations, but is not governed by the old capitalist law of equal profit for equal capital. This does not affect the total amount of surplus value; it does not affect as such the exploitation of labor, but it does affect the distribution of the surplus value among the different capitalist groups.

A complete monopoly in one of the basic industries could take all the profits from the other capitalist enterprises by means of price fixing. Of course, there is no such thing as complete monopoly, but strong monopolies as we have today go far in securing extra profit. And where the different monopolistic interests are strongly united into Big financial organizations in the hands of a few Moneykings, as is the case in the United States, the power of price regulation is almost unlimited.

What are the limits besides those resulting from the total amount of surplus value created by labor?

Taking away all the profit from so-called independent capitalist enterprises would kill these enterprises, and Monopolistic industry needs for the time being the products and services of outside industries and means of distribution. These can be swallowed gradually, but only as a process of development that cannot be forced beyond certain limits of technique and organization.

Independent capitalists therefore are allowed to continue their existence and to receive a part of the general surplus value, so as to give the average capitalist a living according to certain historic standards, which standards naturally will show a tendency to fall, as the Monopolistic interests continue to grow and become more independent from the co-operation with outside capital.

The capitalist State, as the representative of the general capitalist interests, has to look at it that the monopolists do not kill their competitors faster than is compatible with the technical development and the organization of our system of production and distribution. This is in the interest of Big Capital itself and does in no way interfere with the fact that the State is dominated by the Interests of the Moneykings.

But how to explain that we do not see a strong fight of the "independent" capitalists against the monopolists who evidently take a part from their sacred profits? To those who consider class struggles from the narrow point of mere conflicts between the economic interests of groups and individuals, this lack of fighting spirit must look inexplicable. Conflicts of economic interests, however, only get the wider meaning of class struggles, in so far as they represent the clash of an uprising class with the powers that be. In the conflict between the highly concentrated monopoly and the "independent" capitalist, the latter represents the past instead of the future and his power, therefore, is insignificant. The "independent" capitalist can and will be swallowed by Big Capital, and a real opposition would only help to hasten the process for those in revolt. Only the workers are indispensable for any form of capitalist profit and there lies the strength for final victory. Conditions are ripe for a Socialist commonwealth, if the workers only develop the power of their number and their organization. The only chance for the masters to postpone their downfall is to disorganize and to divide the working class, by bribing certain groups and certain "leaders."

The Moneykings are willing to pay for service and they may grant considerable allowances to "independent" capitalists or leading employers. It is part of their wasteful expenditure for the upkeep of the present system not only to have an army and a police, churches and professors to subjugate and to fool the workers, but also to allow a class of smaller capitalists to gain such profits as to make them feel comfortable enough to support and defend the system. It is this same policy that allows some superior officials and also the upper layers of labor to secure a larger salary or wage.

This explains the ideology of these groups in favor of Imperialism. It goes far in explaining the collapse of the Socialist parties built up greatly on the middle class groups of better paid workers, intellectuals, officials and small capitalists. The privileged position of these groups when compared with the great army of average workers, combined with the absence of class power to defend these privileges, gives them an interest in supporting the powers that control the privileges and makes them dependent tools of Imperialism. The more powerful the particular group of Imperialists upon whose favors these servile groups depend, the better chances for well paid jobs and other favors and bribes, which gives a material basis for modern "nationalism," whose main feature is the fact that it is not national. Loyal to the Imperialistic Unit, they must adapt themselves to the most curious combinations of heterogeneous nations and governments and must change the object of their devotion with a readiness of mind far more surprising than was ever accomplished under the slogan, "The King is dead, long live the King."

These groups have no economic strength because they are not vital to production. They can be substituted or eliminated if necessary and have largely the character of capitalist servants. And we know that servants never made a good material for the support of class-conscious workers. They will continue to cooperate with the old masters as long as these are in a position to promise rewards for service. They will desert the old ruling class as soon as its power is waning beyond repair. And then they will ask the favor of the new powers by claiming to have been in sympathy with them all the time.

The only class that is fit to bring about the Social Revolution is the great mass of average workers, who produce the surplus value, who are indispensable in the process of production, upon whose exploitation is built the whole system of capitalist organization and capitalist wealth.

Nationalism in its modern Imperialistic form is the ideology which binds together the middle classes, including the upper layers of labor with the plutocratic masters of the world; Mass-action the weapon of the workers to defeat this alliance.

The present class struggle must take the form of mass-action against Imperialism.