The Dead Sea

The Mediterranean is becoming the new Dead Sea. Dead, not because of a lack of fish, but because of an abundance of human corpses. Hundreds of refugees from the Middle East and Africa try to cross into western Europe every day on unseaworthy traffickers' boats and many of them drown: 1500 so far this year.

One irony of not being able to swim is that, if you drown, your body decomposes and gases inflate your stomach. This then makes you lighter than water. So, after failing to stay afloat alive after many hours in the cold sea, you end up being able to float, dead, and coloured a little more grey and blue than a European beach tourism brochure would want to have on its front page.

Italy and Malta have raised the alarm about refugees crossing the Mediterranean, and this week European ministers will decide what to do about it. But they have a problem, since European politics is at the centre of the trouble. The UK and France promoted the intervention in Libya to unseat Gaddafi; France has screwed up its colonies in Tunisia, Mali and Chad; Sudan, Kenya, Ethiopia and Somalia have been on the receiving end of many powers' interests; Syria has been undermined by the western powers, while Israel, a key force of instability in the Middle East, is persistently backed by the Europeans as well as by the US, something adding to the Palestinian contingent among the refugees.

The political trouble for Europe is exacerbated by a chronic economic crisis that means it is even harder to maintain the veneer of supporting 'human rights' and all the other verbiage. So, their policy will probably target the symptoms, ie the traffickers. The cause, their role in the oppression of the Middle East and Africa, will obviously not be considered.

Tony Norfield, 22 April 2015

Labour's Colonial Policy

This article is based on notes prompted by reading an interesting book, Imperialism and the British Labour Movement, 1914-1964, by Partha Sarathi Gupta, published in 1975. I find it particularly of interest because it presents some original material from a time when the Labour Party will claim to have been 'socialist' in some sense. So, this article can be seen as an anti-nostalgia exercise! Things never were any good with this pro-imperialist party.

Gupta has extensive documentation of debates in the House of Commons, Labour Party conference speeches and policy recommendations from such bodies as the Fabian Colonial Bureau and the Movement for Colonial Freedom. He also gives examples of the racism of many leaders of the 'labour movement', especially regarding Africa. More important for my current purpose is that he highlights how Britain's plans for colonial development were always presented as being mutually beneficial, but were always based upon Britain's needs and in directions determined by the colonial rulers, not by the local populations.

The book is a dry read, and with a number of questionable views, for example that by the early 1960s 'social imperialist sentiment had been eliminated' in the UK (p. 393). However, it offers some striking comments and statements that illustrate the 'socialism in words' and 'imperialism in deeds' perspective of the Labour Party in the 1940s and 1950s that I will set out below. A good summary of Labour politics is given in Gupta's conclusion to a chapter on 'Colonial reforms':

"A large body of opinion inside the [labour] movement was representative of 'little Englanders', who were preoccupied with social transformation at home and anxious to avoid military and political engagements abroad. In moments of crisis a social imperial syndrome became active. Though it was originally noticed mainly among those trade unionists who were least affected by socialist ideas, the imperialist bias displayed by Bevin in general [Ernest Bevin, Labour's staunch anti-communist Foreign Secretary, 1945-1951] and by John Strachey over the groundnuts affair [see below] showed that persons with a Marxist background could slide easily into a social-imperialist position once they became pre-occupied with building socialism in their own country only." (pp. 346-347)

Despite the little Englanders being 'anxious to avoid military and political engagements abroad', Gupta does not mention that there was no labour movement opposition to Britain's military efforts to re-establish its own and other European colonies after 1945, possibly because these used Indian and recently defeated Japanese troops against local nationalists in Asia, and hardly any British troops. But, I will turn attention to the more direct British dimension of colonial economic exploitation.

The first example is John Strachey. Named in House of Commons records as Evelyn Strachey, MP for Dundee, and with the more elaborate nomenclature on his birth certificate of Evelyn John St Loe Strachey, he was an outcome of Eton and Oxford and an itinerant politician (see his Wikipedia entry) with successive socialist, Mosley, Communist, anti- and pro-Keynesian views. He was also a Minister of Food and a Secretary of State for War. Despite these dizzying turns, throughout his life he remained a consistent British nationalist. In a January 1948 House of Commons debate on the Colonial Development Corporation bill, he concluded:

"I should like to end this discussion by striking this note, that by one means or another, by hook or by crook, the development of primary production of all sorts, in the Colonial areas, Colonial territories and dependent areas in the Commonwealth, as well as generally throughout the world, in far more abundant quantities than exist today is, it is hardly too much to say, a life and death matter for the economy of this country."

This perspective was behind his support for the infamous groundnut scheme in Tanzania, then called Tanganyika. Britain's plan to plant groundnuts in an unsuitable region with idiotic technology turned into a loss-making fiasco and was abandoned. However, while this is often seen as a dumb development project, the basic notion behind it receives less attention: it was to use cheap labour in the colonies to grow products that would feed the British back home, and so reduce the need to import from outside the Empire. This would avoid paying in US dollars for some food supplies when there was already a shortage of dollars in Britain's reserves. Instead, the producers of Tanzania would receive payment in terms of a devaluing sterling.

The groundnuts scheme was only one case of colonial exploitation, realised or planned. More importantly, Britain had a number of marketing boards that were monopoly buyers of the commodity output of its colonies, and limited the development of any processing operations so that they received at best, and usually below, the world market price for the raw commodity. House of Commons Parliamentary debates always argued that a 'fair price' was being set, and that the buying operation carried risks to Britain's finances. But the buying prices were always set at below what the market price turned out to be. Furthermore, the surpluses from selling these products on the market always ended up in sterling balances based in London banks! This was how the system worked.

In a May 1951 debate on the West African Marketing Boards, one Labour MP, the Rugby and Oxford educated barrister, Richard Acland, made the following comment as part of a longer apologia:

"Firstly, the prices in the long-term contracts made by our Government were perfectly fair prices, there being genuine arguments at the time of the contracts to suggest that world prices for the crops might have fallen. But in fact that has never happened and the opposite has always taken place. To give an example: We are purchasing West African palm oil at £94 a ton, when the same oil on the free market has been fluctuating from £134 to £210 per ton."

What a stroke of luck that no West Africans were listening! Just in case they were, he denied that the amounts concerned were of any significance.

This is not to say that Labour MPs were being too truthful, and not forward-looking enough. How forward-looking, to see the way in which British imperialism's economic stresses could be solved so that we could have a 'Jerusalem builded here', on the backs of the colonies, is shown in the next quotation. Harold Wilson, a future Labour Prime Minister, had this to say in the House of Commons when Labour was in opposition in February 1953:

"There are very many schemes that can earn and save dollars and we want to know about them. There is copper in Rhodesia and Uganda; zinc and lead in Nigeria and tin in Uganda and British Honduras. We have to face the working out of the tin reserves in Malaya, before many years are over. There is, too, bauxite in Jamaica, manganese in India and South Africa, tungsten in Uganda, beryllium in India and columbium in Uganda. I am sure that these things are being considered by the Foreign Secretary, and what we should like to know at some convenient time—I would not press him to answer in detail tonight—is what is being done to press on with these schemes.

"Perhaps the most important step in the Commonwealth development [sic!] would be for the Government to work out now a wide-ranging geological survey of Colonial Territories ... I do not think that anyone in the House would deny that the answer to all our dollar problems may well be found 200 or 1,000 feet below the soil in the Colonial areas, and a really imaginative geological survey might possibly solve a lot of our problems over rather a long time."

The economic policy in the colonies, now given the honeyed description of 'Commonwealth' rather than Empire, was to meet British imperialism's requirements. That is not a surprise for critics of imperialism, but let me leave you with a sickening Labour socialist conclusion. Recognising that the Empire, sorry, Commonwealth, may not persist on the same footing, noting the colonies' contribution to the Sterling Area balances and expressing a desire that colonial peoples have a better future, Jennie Lee, wife of Aneurin Bevan, the Labour left saint, had this to say at Labour's Annual Conference in October 1956:

"We have to work for the day when there will be a higher standard of living here, a higher standard of living in the colonies, and when as free and friendly nations they will want us to be their bankers." (p. 376)

She was ahead of her time. The City of London today is the biggest centre of global banking, despite Britain having a much worse current account deficit than when she was speaking. British imperialism found other ways of appropriating the value of what others produce.

Tony Norfield, 7 December 2014

Rosetta and Ebola

The technical achievements of the Rosetta space programme fill the news headlines, at least in Europe. The near-$2 billion price of the expedition is considered trifling. Here is a celebration of human ingenuity! But here on earth, somewhat less than the distance of the comet that is 500 million kilometres away from the centres of power, many thousands of people are dying from ebola, a disease that has devastated the economies and societies of several west African countries, largely due to the collapse (or non-existence) of local health services. More food for thought in considering the human cost of the imperialist world economy.

Tony Norfield, 12 November 2014

UK Foreign Direct Investment Profits

The table below is an update of some figures shown in the first article on this blog, 'The Economics of British Imperialism' in May 2011. That article covered the broad mechanism in play, something I am still researching, particularly its financial aspects. This table only refers to one dimension of the total picture, but an interesting one nevertheless. It shows the profit rates of outward UK direct investment, in total and by geographical region, including some key countries.

Profit rates are calculated by measuring company earnings divided by the average value of share capital and reserves owned by UK companies in that year and the previous one. The same pattern of profit rates applies for these numbers that go up to end-2011 as the for the ones to end-2009 in the 2011 article: the bulk of FDI assets are located in the richer countries, but a much higher profit rate is gained from the poorer countries. There are exceptions, especially for UK investment (largely in mining operations) in Australia. However, the overall divergence is clear. Africa, Asia (including the Middle East in these data) and Brazil stand out as sources of huge premium investment returns compared to other locations. The India numbers probably explain UK Prime Minister Cameron's visit last month to India, together with representatives of more than 100 British companies.

It seems odd that there would be such a divergence in profit rates. After all, if a higher profit rate is available elsewhere, then why does not more capital migrate to that country, rather than stay in one of the richer countries? This raises bigger issues about the monopolistic structure of the world market, whether there is much of a process of equalising rates of profit in the world economy, and whether having a presence in major, rich markets is necessary from the perspective of maintaining commercial control of major consumer markets, even if it turns out not to be directly profitable. Or, alternatively the data may just be rubbish, hiding the real locations of company operations and/or giving the wrong view of the returns on investment! One obvious problem here is that companies can relatively easily relocate the location of their profits to countries with lower tax rates, whether by charging 'licence fees' to a pretend headquarters in a tax haven, or by some other means of transfer pricing.

John Smith, cited elsewhere on this blog, has argued correctly that one should distinguish FDI by its type: where is the productive FDI capital located, as opposed to the commercial or financial capital, or other unproductive operations? In addition, what may appear to be productive capital might be getting most of its 'value added' from cheap supplies from poor countries. UK FDI data suggest that most productive UK FDI is located in rich countries, but these are regional figures with little country breakdown, something that is omitted to secure individual company information, but which only adds to scepticism about what the data actually reflect. In any case, such data cannot take into account the benefits to major companies of their links with foreign suppliers that they dominate in so-called value-chains.

This is a complex topic that is hard to resolve with official statistics. However, insofar as the data represent anything, the following table is what they show:

In 2011, the UK gained £102 billion of profits in total from its foreign direct investment, £58 billion more than was accrued by foreign direct investment in the UK, and the highest net earnings figure since 2008. Nice work if, as an imperial power, you can get it ...


Tony Norfield, 22 March 2013

The Geometry of Imperialism

I have a globe on my desk. One of the tell-tale signs on such maps of the world is not the pink colour of colonies of the British Empire. That is so passé, and these maps are no longer published. Instead, the significant feature is the number of lengthy straight lines on the parts of the global map covering Africa and the Middle East. While there are straight lines elsewhere, these are the ones that stand out, the ones relating most clearly to the division of colonies in this region by the main European imperial powers.[1]

The straight lines are the product of colonial power that divided areas of influence, irrespective of the different ethnic and social groups that lived in them. The ruling groups in Arab countries were then determined by their relationship with the influential imperialist powers; Israel was, in a more complex way, established as a tool of imperialism to overlook the potentially less obedient Arabs. This means that political issues in these regions cannot be solved within the ‘countries’ concerned. A stable political deal between the different groups has not been established by agreement between them; rather the ascendancy of a particular group has been supported by imperialist influence. This is the basis for civil war, especially when the interests of imperialism change and the formerly leading group no longer has its previous power and support. Then a fragile peace, or a just-acceptable degree of terror or oppression, is no longer sustainable.

In this context, I recommend that you read the linked article/interview that gives an excellent account of the current situation in Syria. This shows, although implicitly, how solutions to the problems in a particular country cannot be resolved within that country, especially when these affect the balance of forces in the region and the interests of the imperialist powers.

Tony Norfield, 13 June 2012

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[1] Just look on Wikipedia for the histories of the formation of African and Middle Eastern states. Britain and France are the main players, with a small role played by Italy, though many decisions on the continent were taken to limit German influence before World War 1. A topic not covered in these otherwise useful details is the way in which Britain’s colonial policy exacerbated ethnic and religious tensions, often with the classic policy of backing the minority faction in a country because they would be more dependent on the external power for support. One would not expect Wikipedia to be able to give a decent account of the role of Israel as a tool of imperialism.