There are close to 7 billion people in the world, in some 200 countries. However, a very small minority of rich, powerful countries - or rather, the rich and powerful in these countries - run the world economy. The way in which this happens is the focus of my research and the subject of many articles on this blog. In this article, I present some statistics to highlight the stratification of the world economy between the small number of imperialist powers and the rest. I welcome any comments on this analysis.
Five features *
Lenin outlined five features of imperialism, from the decisive role of capitalist monopolies, to the development of ‘finance capital’ and the export of capital, to the territorial division of the world between the biggest capitalist powers. Although the form of territorial division has changed, with the end of colonial empires, these features continue to describe the world economy. Here I set out five complementary statistics for examining imperialism today from data for 180 different countries.
The first is nominal GDP. This measure of economic output is the most widely used in official statistics, though it has a number of drawbacks, not least that it is a measure of value appropriated rather than value created. However, it is an easy number to obtain for the size of economic output in a particular country. The degree to which it is exaggerated by value appropriated from elsewhere will also be an advantage if we are to use it as a measure of global economic power. Of course, countries with a large GDP are not necessarily rich – they might have a large population with a very low average income. Nevertheless, a high GDP ranking indicates that the country has weight, and presumably some influence, in the world economy.
The second measure is the size of military spending by each country. This spending might be for internal repression rather than for external power projection, but it is notable that the five biggest spenders in the world are also permanent members of the UN Security Council, each with a veto power on UN decisions. In general, it looks like a good measure to use as an indicator of imperial status.
For the third measure, I use figures for the stock of foreign direct investment (FDI) owned by each country. These figures will not fully reflect a country’s external economic power. For example, they exclude privileges and benefits that may come from commercial and trading relationships that may have little to do with owning companies and property in other countries. Neither will the FDI numbers reflect the power, influence and revenues that come from owning foreign portfolio assets (equities and bonds). However, the FDI data can be used as one guide to how far a country is able to exploit workers in other countries.
The final measures are used to reflect the financial power of different countries. One is a country’s ownership of the top 50 international banks; the other is the importance of a country’s currency in central bank foreign exchange reserves. These measures are far from comprehensive, but they should give an indication of how far a country’s banks are important on the world stage and how far its currency is accepted internationally. Probably the main dimension missing from these particular measures is how far a country is able to utilise the financial sector to appropriate value from the world economy when this does not necessarily come via its own banks, or from the use of its own currency.
Each of the statistical measures I use for the index has problems, but they offer a simple way in which to sum up key features of a country’s economic and political position in the world. In order to standardise the data for comparison purposes, I have set the highest value under each heading at 100. This means that if, for example, one country has the highest GDP, then its value will be shown as 100. Other countries with smaller GDPs will be shown as a proportion of that number, as 30, for example.
The five measures used are given equal weights, and the total index is an average of the individual values. This summary index is a guide to a country’s status. Results for the different countries show dramatically different values, and there is a clear hierarchy between the small number of countries at the top and the remainder with index values far behind.
Table 1: The Imperialism Index
Notes and sources: Calculated from original IMF, SIPRI, UNCTAD data. GDP data were for 2011, military spending data for 2010, FDI stock for 2010, ‘top banks’ for 2009, central bank FX reserves for end-2011. Figures for China include Hong Kong. The total index is an unweighted average of the components.
Table 1 shows the results for the top 20 countries ranked by their total index value. The US stands out at the top of each component measure, with a total (average) score of 100. Next in line is the UK, at a mere 32 points. The UK ranks close to the US only in the significance of its banking sector, and it is a distant second in terms of FDI holdings. France is not far behind the UK, spending slightly more on the military and having a higher GDP, but it scores less on the other measures than the UK. Germany is ranked a bit lower than France. This latter relationship may be surprising, since the French economy is smaller than Germany’s and more central banks hold German securities than French. But France has a higher rank in terms of military spending, FDI and its international banking position. This correlates well with France (like the UK) being a more active promoter of war.
Japan ranks at a significant margin below Germany in these measures of imperial power, with an index value close to 23. While Japan is the second largest world economy in terms of nominal GDP, the prolonged stagnation in Japan’s economy has damaged its banks and reduced the scope for its corporations to invest abroad.
China is a significant member of the top group in this classification, ranking 6th at just below 20 index points. Its GDP is half the size of that in the US, though ‘purchasing power parity’ measures put it much closer. Its military spending is the second largest in the world, though still less than 20% of that in the US. American strategists are nevertheless concerned because China can mobilise a lot of cheap manpower for the military, and the gap in hardware capability may not be as big as the sub-20% figure would suggest. The FDI figure for China mainly consists of investments from Hong Kong. These may also be invested in China, so this may incorrectly push the overall index value somewhat higher. However, the leverage that Hong Kong gives China in commerce and finance should not be underestimated. Even though China has a position neither in the measure of top banks, nor in that for central bank holdings of its currency, these factors are bound to change in the next few years. China is slowly developing its financial system, the CNY is being used more in international trade relationships and Chinese banks are bound to play a bigger role in international finance.
Below China, it is a significant drop before the next group of countries, each with index values of less than 12. These countries do not count for much individually on these measures, but they can gain some influence by being part of the European Union (or euro) group of countries, or by being a major banker and foreign investor (Switzerland), or by being politically close to the US (Canada and Australia).
Of the so-called BRIC countries, China has already been placed. Russia, Brazil and India each rank much lower, though each has its own particular advantages in the global system (Russia’s being military). Saudi Arabia is perhaps a surprising element in the top 20 countries, but that is how these numbers work out. The close links of the Saudi royal family with US imperialism mean that it is hard to see this country as an independent player. Its position in the table is due to its military spending that reflects the subsidies it offers to defence contractors in imperialist countries, though it has also played an active role undermining protests in the Middle East, especially in Bahrain.
The following chart shows the same data and illustrates clearly the imperial pecking order. The UK, France, Germany and Japan each has an index value of less than one-third that of the US, but they are each several times bigger than countries further down the scale. Remember that this chart only shows the ‘top 20’ countries. The 20th member, South Korea, has an index value of just 2.1, a fiftieth of the US value and less than a tenth of any of the major European powers or Japan. But further down the list (not shown) are more than 100 countries with an index value of less than 0.1, ones that would be mistaken for the x axis in the chart!
Chart 1: The Imperial Pecking Order
Notes: The height of each bar is given by the country’s total index value, which is then broken down into the respective components. Countries are identified by their two-letter ISO code. Take care, because CH is Switzerland, not China (which is CN), and SA is Saudi Arabia, not South Africa (this country is not shown, as it was ranked number 26). The countries are listed in the same order as in Table 1.
(This chart has been corrected. When originally published, the ISO codes for Canada and Belgium were entered incorrectly)
(This chart has been corrected. When originally published, the ISO codes for Canada and Belgium were entered incorrectly)
The significance of the US in the world economy is not news to anybody; neither is the fact of inequalities in wealth, power and influence between different countries. However, these statistics highlight the divergence in a striking manner. Although the figures are for recent years, in most cases the leading imperialist countries have been in their positions for decades. This is certainly the case for the US and the UK. They did not win their leading role by winning a popularity contest, but by moulding the world in their own interests, using their economic power and the threat or use of violence.
One final point on the index of imperialism presented here. The position of an individual country can only properly be understood by looking at its relationship to the imperialist system as a whole, not simply by examining whether its index value is higher or lower than another’s. It would be foolish to say that a particular index number means a country is imperialist, while one that is a certain amount smaller shows that it is not. The index components summarise only particular dimensions of the system. Different measures would produce different results, and any index measure would have a problem grasping the dynamics of the system.
Tony Norfield, 1 May 2012
 See Imperialism, the Highest Stage of Capitalism, Chapter 7 ‘Imperialism as a special stage of capitalism’. Available on http://www.marxists.org/archive/lenin/works/1916/imp-hsc/index.htm
 See John Smith’s analysis, noted in ‘Imperialism and the Law of Value’, on this blog, 3 December 2011.
 GNP would be a better number, since this also includes net property income from abroad. However, GNP data are less readily available.
 In the case of the euro, I have divided the latest figures for total central bank reserve holdings of euros into components reflecting the proportions of Deutsche marks, French francs, etc, held in 1998.
 I am thinking about Britain here! See ‘The Economics of British Imperialism’, 22 May 2011, on this blog.
Very interesting piece, Tony. However, as you note, ultimately the position of a country has be viewed in terms of the role it plays in the global imperialist system. For instance, while Australia is behind Belgium and the Netherlands in your Imperialism Index, Australia it strikes me is a far more significant imperialist player. And if there was ever to be a war between Australia and the Netherlands or Belgium, I know where my money would be!
Also, a number of countries on the Index aren't actually imperialist anyway, as you also note. So why have countries like India, Brazil, South Korea - or, for that matter, China - on an index specifically called The Imperialism Index. Your index certainly measures forms of capitalist power, but does it actually measure *national imperialisms*?
I'd argue that New Zealand is imperialist. But it's obviously a lot less powerful than some countries which are not. It might be called a junior imperialist to sum up its weight but it is still imperialist.
In terms of Australia, I don't think its status as an imperialist player results from a close relationship with the United States. It's an imperialist player very much in its own right. Its interests coincide with those of the US imperialists in the Asia-Pacific region, although the end of the Cold War and the restoration of capitalism in China have changed that somewhat. Sections of Australian and New Zealand capital are now quite oriented towards China and don't simply line up with the US the way it was once in their interests to.
An interesting approach to the subject. You reference Lenin. Have you or anyone else an opinion on where today's 'weakest link is in the imperialist chain'?
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