The Capitalist Peace, Dependency Theory, and Imperialism

This piece by Scott Patrick originally appeared on Bakunin Matata. Patrick is a PhD candidate studying comparative politics at the American University in Washington, DC. While some of its observations are dated given the upheavals that have defined the Trump administration, it is nonetheless a worthwhile short read: 

We are living in an age of capitalist peace, at least according to some scholars. It may seem unlikely that capitalism, which even its most ardent defenders admit is based on stratification, would foster peaceful relations between people, but there is no shortage of scholarly pieces devoted to the analysis of how trade and interstate conflict interact. While surveying several works on this topic, from the sanguine to the skeptical, it becomes clear that there are aspects of the theory, ranging from the arrangement of the international economic order to the drive of capital accumulation, that are missing from studies that could potentially greatly benefit from their conclusion. Although dependency theory and imperialism are no longer popular in academia as they once were, they do offer perspectives that would serve to make academic studies of the “capitalist peace” more critical and more robust.

More than two centuries after Kant advanced it, the validity of the claim that liberal states are pacific in their relations with other liberal state continues to attract scholarly interest. One of the key arguments articulated in its defense is that liberal states prefer peace as it fosters trade, and as states become integrated into the global marketplace, the costs of conflict are outweighed by the profits of peace. Oneal and Russett (1997) declared this assertion correct after performing a rigorous analysis of data from the post-WWII period320px-McDonalds_Times_Square that illustrated a “separate peace” between liberal states during the Cold War built around shared democratic values and economic interdependence. In a later study, Lupu and Traag (2013) extend this argument further, arguing that indirect trade between members of joint trade communities is as instrumental as direct economic linkages in discouraging conflict, as war generates negative externalities for the trade partners of combatants in addition to the combatants themselves. As trading communities tend to be geographically clustered, they see the influence of indirect trade dependence as the driving factor behind increased regional security agreements in the era of globalization. Trade, from the perspective of these authors, acts as the classical liberals said it would: bringing states together in a “harmony of interests,” where the clarity of gains from tranquility and cooperation would logically overtake and supplant the primal desire of “winner take all.”

What is missing from the above accounts is a consideration of the historical conditions that shaped the “separate peace” enjoyed by liberal states during the postwar era. For example, there was a conscious attempt by the triumphant Allies not to repeat the “Carthaginian peace” of the Treaty of Versailles, which had led to economic collapse and 171px-Europe_Plan_Marshall._Poster_1947a surge in radical politics. Instead, the wealth and might of the United States was directed toward rebuilding the infrastructure of the defeated Axis nations while simultaneously reshaping their politics to be amenable to the support and expansion of U.S. hegemonic power, both in Western Europe and East Asia. The peace that followed was less an organic development and more a purposive political project to shore up support for Washington while also countering the communist critique of capitalism broadcasting from Moscow. To extrapolate from the experiences of the great powers a natural, normal emanation of liberal values is to ignore the critical compulsions those powers had to abide in order to protect and project the interests of capital at the historical moment. The impact of economic power from the developed world onto the developing world is much more telling, as it reveals much more about the hierarchical nature of global capitalism.

Several scholars that have written on economic interdependence and conflict have broached this topic. Morrow (1999), in expressing skepticism that trade prevents conflict, notes that economic interdependence leaves poorer states inclined to preserve the status quo, making their coercion more likely. Moreover, powerful states can utilize economic linkages to send costly signals to their partners, damaging trade flows but nevertheless successfully imposing their will on others. Gartzke, et al (2001) build on this by demonstrating how countries dependent on capital investment are especially at risk of economic disruption brought on by a communication of resolve from a capital-rich partner. In their view, trade itself can be a medium of conflict as wealthy countries push their agenda on poor ones.

For those countries that have existed in a state of underdevelopment in the postwar era, this should not come as news. The work of dependency theorists like Andre Gunder Frank (1966) and Samir Amin (1976) explains in detail how developing countries find their economic and political options placed largely out of their hands due to their involvement in391px-Imagination_Graphique_64_Capital the world economy organized and orchestrated by the affluent industrialized countries. Required to follow neoliberal policy prescriptions to access long-term finance, developing countries are thus unable to implement programs to protect and grow domestic industries or to reduce inequality through redistributionist measures, thereby ensuring that their societies remain strained and unstable. Hence such countries remain at the bottom of vertical economic order, their political development stunted as it is often difficult to appease foreign capital and domestic forces demanding equality and redistribution. The all-too-common outcome (and one conveniently ignored by advocates of “pacific liberalism”) is that developed liberal states provide support for dictators and death squads in Latin America, Africa and elsewhere, so that elites in the developing world commit violence on their behalf to keep their counties and, by extension, industries stable. Of course, it should not be omitted that those same developed liberal states, especially the U.S., has not hesitated to intervene directly in Iran, Guatemala, Chile and elsewhere to violently remove populist leaders who dare to privilege sovereignty over capital access. Yet, because “conflict” is so often defined as direct and fitting in with expectations of conventional war, liberal states that finance right-wing guerrillas and generalissimos or back coups are still considered “pacific” in their relations.

We encounter further trouble with definitions when we consider how liberal theory treats the arena of domestic politics when it comes to the dynamic between trade and conflict. Copeland (1996) focuses on how the benefits and costs of economic interdependence interact in the minds of rational decision-makers along with predictions concerning the 370px-Pyramid_of_Capitalist_Systemfuture trading environment between states. The weighing of peace versus war must also include examinations of fluctuations in trade levels. Brooks (2013) studies the ways in which economic actors within states may lobby state leaders for peace or war before boldly proclaiming that such lobbying no longer needs to occur: foreign direct investment is an able substitute for gunboat diplomacy and the rewards of globalization alone induce elites to accept peace in order to “play ball.” Of course, in all instances the emphasis is on rational decision-makers or pluralistic democratic institutions in crafting policy. What is missing from the analysis are the structural forces that drive capital accumulation in capitalist states that exist distinct from the public sphere of politics and instead reside in the more private sphere of vested interests. After all, the capitalist liberal state depends on the continual development of its productive forces; capitalism abhors a vacuum. If we acknowledge this to be true, it seems unlikely that estimates over shifting trade levels would restrain the untamable drive of capital, much less that global capitalism itself would remove agency from states so they fall naturally together into the rhythm of globalization. Global capitalism may indeed deny human agency, but rather than a force for peace it is more likely a force for imperialism.

To understand the workings of capital accumulation and imperialism, it is worthwhile to look beyond modern liberal scholars and turn to scholars such as Rosa Luxemburg (1951), who wrote in 1913 about capital penetration into “primitive” economies. If accumulation160px-Rosa_Luxemburg was allowed to stagnate, then the collapse of capitalism would necessary follow, so surplus must be converted into capital and expanded into the world market. Her work would be built on by Bukharin (1929)and Lenin (1967), who argued that finance capital and the financial oligarchy hold tantamount power in regards to all other forms of capital – a claim that has echoes in Gartzke, et al (2001) – and pushes states toward imperialism, the highest stage of capitalism. States thereby act in the interests of the capitalist class, inducing their citizenry toward ideologies such as nationalism and militarism that create public support for actions that are rooted in economic projects. For example, Brooks (2013) dismisses the 2003 Iraq invasion by the U.S. as not being indicative of lobbying by economic actors because U.S. firms did not already have a presence (and thus a stake) in the Iraqi oil industry. It does not seem to occur to him that the invasion, superficially presented as being about combatting terrorism and bringing down a war criminal, could have been motivated by an imperialist impulse in his view of benign liberal calculus.

It would not be correct to give the impression that all scholars presume beneficence on the part of liberal states. There have been studies undertaken from the perspective that states can be ruthless opportunists. For example, Li and Reuveny (2011) found that, all other things being equal, a state will choose conflict with a trading partner if that conflict is expected to increase its exports of energy goods and manufactured goods (due to an abundance of buyers) and its imports of manufactured goods (due to an abundance of suppliers). This undermines the traditional liberal view that trade will always lead to peace between trade partners, as conflict can actually boost trade gains. The authors also present their results, however, as questioning the neo-Marxist/neo-mercantilist tenet that asymmetric trade will inevitably lead to conflict due to insecurity, as depending on the trade flow and sectors involved, peace may be promoted instead. Besides the aforementioned objections about how conflict may be defined, it would also be interesting to see if domestic actors (with the tacit support of liberal state benefactors) changed the equation so that direct conflict was no longer necessary, or if liberal states merely lacked the political capital to initiate a conflict due to it not fitting within the ideological structure normally used to generate popular support for military intervention. Although Li and Reuveny are somewhat unique in postulating a theory of trade wherein trade is actually a conflict-inducing variable, they nevertheless do not scale back the magnifying glass to consider the confluence of factors that work at the systemic level of the global market. If they did so, they may find, as dependency theorists and neo-Marxist scholars have found, that the contradictions of global capitalism rest upon a stratified world order predicated on keeping poor states undeveloped politically and economically while the more affluent and industrialized states carry on at the top, crediting their dominance to the rightness of liberal norms and institutions rather than the capitalist system that enriched them and their capitalist classes.

The question of whether trade promotes peace will likely be one that persists in academic circles for a long time to come, but it is apparent there is a need for more critical voices in the discipline. Presumptions that liberal states and their pacific federations emerged organically need to challenged by historical examinations of how they were planned rather than naturally grown. Scholars that express reservations about the capitalist peace are right to consider how economic dependence can lead to coercion and costly signaling, especially when capital is involved, but they must push onward to more penetrating analyses of the global economic hierarchy and how globalization foments polarization and instability in the developing world. Additionally, studies of domestic economic policy should not be limited to rational mediations centered on liberal institutions but state and social apparatuses that exist outside the public sphere, furthering capital accumulation through various means, imperialist or otherwise. It may not be fashionable in the present climate to return to classic works on dependency theory or imperialism, but that does not mean that a good deal about the world we live in cannot be explained – and hopefully enriched – by bringing their approaches into scholarly theoretical research.

2 thoughts on “The Capitalist Peace, Dependency Theory, and Imperialism

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    you wrote the book in iit or something. I think that you can do with a few
    pics to drive the message home a bit, but other than that, this is excellent
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