Departing from this fact, and investigating its enduring overlap with that loose conceptual dyad, the North-South or core-periphery, Utsa and Prabhat Patnaik have composed a capstone work, A Theory of Imperialism. They define imperialism as “a coercive relationship exercised by the capitalist sector on the ‘outside’ world to ensure, first, that it obtains the products that it needs from this ‘outside’ world and second, that it does so at nonincreasing prices.”
Their argument at first and second sight is counter-intuitive, but in fact is sequential and noetic. At its core, it is about “certain phenomena that have always characterized capitalism,” how they fit together, and how they relate to persistent and puzzling features of the world system. The first is the need for a global reserve currency as a permanent store of wealth. An expectation of persistent inflation could undermine any currency, precipitating a pell-mell scramble to gold, or another commodity perceived as a reliable repository of value. For this reason, they argue, an enduring pattern of the world system is to construct and maintain relationships which stave off systematic inflation.
This is where space comes in. The global South countries can produce tropical commodities that the global North cannot. But at a certain point, they can only be produced at an increasing supply price. An increasing supply price produces inflation, which then imperils the “value of money.” Given both the need for a reserve currency and the relationship between the reserve currency and global power, there is an urge to safeguard money’s value. The primary, but not sole, mechanism for this is income deflation. Such deflation is needed in order to compress internal demand and prevent the domestic market in the periphery from absorbing these non-fungible commodities which global North consumers demand – coffee, spices, to some extent sugar, many fruits.
Imposing reduced demand on the warmer and poorer countries conduces to decreased domestic use of both export crops, as well as reduced demand for basic food crops. Such reduced demand, in turn, means that in the face of any increased demand due to accumulation in the global North, producers will match their supply to meet those needs – again, without running into the tripwire of increasing supply price.
In the pre-WWII era, colonialism contained mechanisms aplenty to suppress peripheral demand. Deindustrialization created larger labor reserves, accelerating the surplus drain. Through various chicaneries, the physical produce and wealth of the South went on to flow from its direct producers to the global North. At the same time persistent losses in the terms-of-trade for agricultural goods vis-à-vis manufactured goods – the classic Prebisch-Singer thesis – were another manifestation of contained supply price. Massive labor reserves in the global South, linked to deindustrialization and underuse of agricultural land, also led to persistent deflation, putting constant downwards pressure on wages – incidentally pushing back against persistent conceptions of capitalism as a production-enhancing system. The Patnaiks highlight the constant presence of violence in maintaining these relationships, stating: “Capitalism without imperialism is an impossibility.”
Decolonization put paid to many mechanisms for income deflation, leading to global demand increases, alongside some supply increases through agricultural intensification across the global South. This was the interregnum of global dirigisme. At the same time, the United States developed large current account deficits towards the end of the latter period as it overspent in the War on Vietnam. The Bretton Woods system foundered on these obstacles. But the post-Bretton Woods system still has the dollar as the reserve currency. Neoliberalism had involved many a mechanism for income deflation – manifest in reduced food consumption across the global South. Violence is present, too, amidst kinetic and regulatory attacks on any state seeming, threatening, or even retaining the capacity to emplace projects which increase incomes. The value of money is again secure.
Although they observe that both Lenin and Keynes insisted on the importance of maintaining currencies’ values, their innovation is to build a theoretical skeleton around this observation, and then place considerable empirical flesh upon it. Furthermore, their insistence on the importance and centrality of agriculture is a departure from industry-centric notions of development and underdevelopment which consistently discount the agricultural sector and the struggles possible within it.
Along this tour-de-force, they parry numerous objections to their theory. One is that tropical products are so monetarily light amidst the weight of global GDP or Northern consumption baskets that they cannot matter to the system’s functioning as the Patnaiks propose. But the Patnaiks first note that the low prices of tropical commodities are themselves the product of coerced exchange relationships. They further observe that their relative composition in the import-export balances is less to the point, than what would happen to the global North’s consumption without the global South’s agricultural products.
Some will take issue with the theory. Among them has been David Harvey, whose rebuttal and thereupon the Patnaiks’ riposte is included in the book. He suggests that their theory relies on a crude geographical determinism. He insists on the co-constitution of nature and space, and that the tiny weight of tropical products in various trade aggregates anyway makes the argument moot on its face. He also accuses them of having an “obsession with agriculture,” a charge they readily accept. And he suggests in place of their specification of this mechanism of imperialism Giovanni Arrighi’s “preference to abandon the idea of imperialism,” given the complexity of global production chains. Both Harvey’s critique and the Patnaiks’ rebuttal are worth reading, not least for the Patnaik’s sharp comment on Harvey’s, and metropolitan Marxists’ more broadly, “failure to perceive contemporary imperialism,” in truth a legacy of their failure to see colonialism. Whether and to what extent this is the case ought to be left to the judgment of the reader. This reader, at least, found the Patnaiks compelling, convincing, and a corrective that is urgently indeed.