Empire’s Resources: A Conversation with the Red Nation Podcast

The clearest path to understanding what imperialism means—and why it continues to determine the challenges, possibilities, and struggles of the periphery—is to view it through the lens of monopoly capital, which is deeply ingrained in the road to empire. Specifically, the road to the American Empire.

To understand this, we must examine the path of this nation’s own development: why it initially gave birth to monopoly capital, and conversely, how monopoly capital relates to the sustainability of empire. I know I am venturing into the backyard of Abby’s work here, but this is how I propose we discuss resource wars and imperialism today.

In terms of the relationship between the road to empire and monopoly capital, the latter was obviously instrumental—and essential— to the rise of US industry from the very beginning. In this sense, monopoly capital refers to the historical conditions under which productive and agrarian capital truly embraced larger and larger areas of the resource-rich peripheries of the world economy. When we speak of monopoly capital, we are speaking about the historical conditions under which a faction of the ruling class became an industrialist class pivotal for the triumph of American capital over British, French, and German competitors in the nineteenth-century in the Atlantic world. The historical rise of this class deserves a lengthy discussion, but what needs to be emphasized is that under the conditions of late nineteenth-century world economy (when a dramatic restructuring of world cycles of capital accumulation had already taken place since A.D. 1750s) this class enjoyed the conditions for bringing within its orbit larger and larger amounts of land from Latin American neighbors, later on, the rest of the world. Fundamentally, this process was driven by ferocious competition geared towards capturing resources to sustain the mineral-hungry American industry.

There is an entire history at stake here that we have to remember. The United States entered its rise toward the monopoly capital stage in the 19th century facing what I would call resource deficits and geological scarcities. I know this might sound perplexing to a general audience that has been socialized to think of the United States as a ‘New Canaan’—a land of abundant resources, where the gold rushes of Canada, California, Nevada, and Alaska supposedly allowed the country to endogenously build the conditions to rise to the top. Such an idea is an American fairytale—it is ahistorical and part of a dynamic ideological system of bourgeois ideologies most of us learned in school. Today, we have robust empirical evidence that allows us to identify severe geological deficits the American economy confronted, along with the responses of industry in each period.

The dynamic and long-term history of resource constraints explains why monopoly capital—or the conditions that allow the ruling class to exert monopolistic power through ferocious competition—is by no means the outcome of a single decade, or a single year, or even a single century. It was instrumental to the road of the American empire since the inception of this country. Think of the century of Indian Wars—roughly between the mid-eighteenth and mid-nineteenth centuries—and the ongoing bullion and resource pressures those wars imposed upon the young republic. The Indian wars were costly, and they increased the need the United States had for its own fresh sources of metals for minting and trade purposes. Gold was vital because it allowed the United States to carve strategic monetary advantages in dynamic world bullion and money markets. Along with coined silver moneys (such as the Spanish peso), gold-based moneys allowed a then rising bourgeoisie to exert competitive pressures against London-based financiers, who in turn had their tentacles spread all over mineral-producing regions of Latin America. The need to secure low-cost access to precious metals was in my view the triggering factor for the eighteenth- and nineteenth-century Indian wars. In this manner, the quest for territorial expansion and mineral resources became the twin pillars sustaining the making of empire, in the context of inter-imperialist competition in the Western Hemisphere. While waging costly Indian wars, the United States forged a vision of its future. This was by no means a matter of ideology, but a matter of cementing the rise of ‘productive’ capital based simultaneously upon violent monopolies of natural resources and warfare. These are the twin pillars of empire.

As you know already, these are dynamic relations, so waging wars internally and externally creates relentless pressures for the United States to satiate its voracious appetite for resources. By the time we reach the late nineteenth and early twentieth century, we already see the rise of an industrial engine pushing the United States to grab every single geological bounty in North America and beyond. So that the making of wars and a voracious appetite for mineral resources become two sides of one single coin. We learned in school a false chronology that distorts the essential historical conditions at stake. We learned that, first, came the Indian wars, then the territorial acquisition of Mexico, and finally the wars of the late nineteenth century. In reality, these phenomena were functionally connected. Warfare and voracious appetite for minerals were, from day one, the foundational motor of the economy of the United States empire.

Consequently, the United States entered the twentieth century with a distinct structural makeup that makes it unique in world history. Its economic rise in the nineteenth century, under the conditions described earlier, effectively eliminated European imperialist competition, allowing the United States to claim geological bounties of the Americas. This means that long before it became an industrial superpower after the Second World War, and long before the rise of the so-called ‘neoliberal era’ (a highly distorting term, too), the United States was already conditioned to the sort of geological grabbing we witness today, such as the imperialist warfare in Cuba, Venezuela, and the attempts at monopolizing oil traffic in the Strait of Hormuz.

No other empire in world history has had these two dimensions -wars and the need to secure low-cost access to minerals- so organically tied to the making of economic power. What does this mean understanding of our times, or the frontiers of ‘progress,’ and the horizon of profits that today’s monopoly capital has opened on behalf of the ruling class? It is important, first, to emphasize that the competitive pressures that put monopoly capital in motion in the twentieth century were different from the competitive pressures that triggered the motion of monopoly capital of the British ruling class in the Victorian era. Certainly, profit-making mechanisms remain essentially the same but nineteenth-century capital was primarily productive, meaning industrial capital or capital that had to rapidly modernize the economy in the decades leading up to and immediately following the Second World War. I know words such as ‘progress’ and ‘development’ are out of fashion, and are loaded ideologically, but we must think in terms of expansion of world output (however we want to measure it), labor productivity, development of maritime shipping and transport routes, rise of urbanization, etc., that in sum trigger income and demographic change.

We know that this world economic change had a very sinister side in the case of the United States economy. To sustain monopoly capital, the State had to continuously invest in and expand the production of the means of warfare or the tools to annihilate populations, which in turn required the increasing consumption of critical metals and minerals. This is in my view our historical problem. It is a profound problem because this is the manifestation of United States monopoly capital today, as it exists to generate profits for which it has to endlessly expand the horizon for the production of means of warfare, for which in turn it has to endlessly secure low-cost access to old and new minerals. I insist that this is an unprecedented historical problem, the real root of all ecological crises that world system scholars debate. The Spanish Empire had nothing comparable to this instrumentality; the British Empire either. The Dutch commercial empire had a different instrumentality, operating under different competitive pressures. The more wars the United States wages, the more it needs to secure low-cost access to mineral and metal supply and trade networks, which in turn sustain the specific functions and operations of its monopoly capital, and all while continually modernizing production of weapons and means of warfare.

Going back to your question on history, by the 1950s and 1960s, we had a radically different form of monopoly capital and one that Lenin did not predict. In these decades, the United States worked to overcome its geological deficit (the natural, internal resource scarcities inherent to the economic development of the country) by scrambling for minerals in Canada, opening old internal mining frontiers, and recycling of scrap metals. Geologists then openly debated these deficits and how this condition impinged upon the growth of domestic industries. Despite domestic copper production booms, the United States relied upon foreign minerals, and did so by maneuvering changing conditions in Latin America to secure geological bounties of the region.

To address your question, United States capital must incessantly expand production of weapons and means of warfare in order to sustain its monopolistic advantages. This discussion matters because this is not dead history; we are describing dynamic world functions and operations of the active machinery of the empire today. We have to look beyond a simple Atlantic-centric view. I invite the audience to do what we do in our collective’s internal debates: lay the world map flat on the floor so we can view the horizontal and vertical operations, functions and relations of monopoly capital.

While United States corporations enjoyed monopolistic control over Latin American mineral production in the 1950s and 1960s, either directly or indirectly through subsidiaries of transnational corporations, the Cold War deepened certain vulnerabilities of United States domestic industries. In my view, the core threat to United States industrial power, or the catalyst that eventually pushed monopoly capital towards seeking financial profits, had a lot to do with mining and metallurgical developments of the former Soviet Union. The former Soviet Union (particularly Russia’s lands) had extensive polymetallic geological deposits, such as the ore deposits of the Ural Mountain range, which are beyond any doubt, some of the greatest stocks of raw materials for the production of means of production. The United States had then, and today still has nothing comparable in its domestic territory.

During the 1950s and 1970s, the Soviet Union achieved a spectacular mining and metallurgical revolution, despite incredibly difficult geographical conditions. Its geological bounties allowed it to autonomously build an industrial project, which led to the rise of a formidable heavy-capital and machinery industry (and one that had all the ecological contradictions that such industries had everywhere in the world). The mineral self-sufficiency of the Soviet Union aggravated the problems created by revolutionary and nationalist processes in the periphery during those decades, given that these processes threatened United States low-cost access to foreign minerals. I believe these were the forces that placed United States monopoly industrial capital in a highly vulnerable position, in the mature years of the First Cold War.

To counter this problem, the United States initiated what some call ‘neoliberal reforms.’ The term ‘neoliberalism,’ however, is a euphemism. It is a misleading term that we must reject on historical and theoretical grounds. What actually happened in the 1970s was that the United States was forced to confront its structural vulnerability, namely, the problem of securing low-cost access to minerals, and which the Soviet Union’s mineral self-sufficiency had thrown into sharp relief. Then, the United States launched a decades-long counter-revolution -what Giovanni Arrighi called a global monetarist counter-revolution- to rescue its domestic capital from its own structural crisis (Arrighi, however, could not see the resource dimension of this crisis). There were other interrelated dynamics at play, such as shifting global production centers, the crisis of Latin American developmentalism, the rising debt crisis, the Open Up reforms of China, etc.

In essence, the United States began difficult negotiations and coordination with its North Atlantic allies, particularly the United Kingdom, Germany (the Federal Republic of Germany, before 1989), and Canada, seeking to coordinate new functions and operations for a handful of Western banks which had massive amounts of money (or a surplus of capital) ready to be put into circulation in the world economy, allowing the United States ruling class to recover its losses from the conditions mentioned earlier. This money surplus came from OPEC deposits of oil profits (in US dollars) in a handful of Western banks, and thus, the term petro-dollars coined by economists to designate the mass of liquidity that became a ‘fresh’ source of finance capital and profits in this period.

To picture how this monetarist counter-revolution worked, you need a cinematic mentality because it was a world counter-revolution that triggered spatial reorganization of the economies of the core and the periphery alike. I say this because the United States empire essentially put its ultimate asset -its warfare instrumentality and machinery- at the center of global finance capital, by reproducing the conditions for the globalization of a conglomerate of Western banks. States everywhere withdrew their traditional support to domestic productive (industrial) capital, and instead pivoted towards attracting injections of capital not in the form of productive investments, but in the form of loans granted by global creditors operating like a cartel shielded from public scrutiny by the functioning of the International Monetary Fund. New flows of finance capital filled the vacuum left by the crisis of national, developmentalist projects, so that poverty, underdevelopment, and the structural problems of peripheral-dependent capitalism have increased not decreased. In the 1980s and 1990s, the most conspicuous battlegrounds of this counter-revolution were the mass privatization of State mining and raw materials enterprises, frenzied mergers and acquisitions, and the consolidation of Western mining giants (from Switzerland, Australia, the United Kingdom, and Canada) that rapidly displaced smaller competitors.

This gave rise to a completely different kind of monopoly capital. By the 1990s and 2000s, it became clear that the era of traditional monopoly industrial capital was over. The ruling class of the empire no longer sustains itself through industrial monopolies. Today, global conglomerates of finance capital keep the ruling class of the empire alive, allowing United States oligopolistic capital to do what it does best, namely, expanding production of weapons and means of warfare.

This new imperial landscape presents a shifting scenario for the Global South. In our collective, we have debated this situation extensively. It is clear that in the short-run, only a select few nations in the periphery actually strategically enjoy the conditions to challenge and exacerbate the functioning and operations of today’s monopoly capital. In the long run, shifting class alliances in Latin America and many African countries will be central to building the pre-conditions to challenge the resource vulnerabilities that still live in the womb of the United States economy.

Jeannette Graulau is a member of AISC.