Imperialism is one of the most widely discussed topics of this century. In its modern form, the term owes its currency to Lenin. Today it is one of the most popular words used by Western academics and intellectuals. The term is emotive and refers to the iniquity of the economically advanced countries of the West, who allegedly owe their prosperity to the exploitation of underdeveloped countries.
The idea that the West is responsible for the poverty of the "third world" is now widespread both in academic circles and the literature on economic development. It is a premise of international organizations such as the United Nations Conference on Trade and Development (UNCTAD). Recently Gunnar Myrdal, the most well-known writer on economic development, has written a one million word political pamphlet elaborating on this theme.
After decades of this propaganda, today it is taken for granted by many that any Western company that has investments in an underdeveloped country is an imperialist. Even free trade between Western and "third world" countries is said to be a form of imperialism.
The voluminous writings about imperialism are a mask behind which hide the real imperialists. To unmask the real imperialists does not require one million words. I propose to do it here.
In some nations of West Africa there are state export monopolies, or marketing boards as they are officially described, that extend their control over practically all agricultural products. These boards were set up ostensibly to stabilize the prices received by private farmers. African farmers, if they wish to sell their crops, must sell to the state marketing boards at prices set by the boards. The boards in turn sell the crops on the world market. The original idea was that during years of high world market prices, the boards would hold back part of the proceeds from the producers in order to provide a reserve for years when world market prices were low. In this way incomes were to be stabilized.
When these state monopolies were introduced, categorical formal official assurances were given that the marketing boards would serve as trustees and agents for the private producers and that no money would be withheld overall from the farmers. In the words of the supporters of the marketing monopolies: "There will be no question of the boards making a profit at the expense of West African producers. On the average of a period of years, the average price paid to the producers will be equal to the average net price realized on world markets, and the boards' buying and selling transactions will, therefore, approximately balance."
INSTRUMENT OF EXPLOITATION
By 1962 between one-third and one-half of the commercial values of their crops were withheld by the state marketing monopolies from the producers in Nigeria and Gold Coast-Ghana. The total sum withheld exceeded two billion dollars! The political changes and upheavals in Nigeria and Ghana in the 1960s stopped the publication of consistent statistical information on the operations of the marketing boards, but the evidence indicates that the state marketing monopolies continue to be the instrument of exploitation of those whom they were ostensibly set up to help. What was supposed to be state help to private producers has resulted in prolonged large-scale confiscation of their incomes.
What has become of this huge sum stolen from the poorest elements of the populations by their own governments? Some of it was lost in currency devaluations, but much of it was transferred to cover current operating expenses of the governments. In effect a productive sector of the population, whose money incomes are minuscule, has been kept poor by being taxed at rates equivalent to those levied on American annual incomes of $50,000 to $140,000! The consumption and investment of West African farmers have been throttled in order that civil servants and government officials can enjoy relatively high incomes.
This makes it clear why West African governments are such vociferous consumers of the anti-Western imperialist diatribes that originate in the West. It is always in the interest of indigenous government to support the argument that the country is exploited by foreigners.
The charge of imperialism was once a main weapon of Marxist-Leninists. But the use of this charge has been usurped by the West's own anti-Western intellectuals. It fits the purposes of advocates of world government and income redistribution between countries, and serves as a mask for the exploitation of Western taxpayers who are told they must assuage through foreign aid the alleged imperialist guilt. As Professor Peter Bauer of the London School of Economics has written in his monumental book DISSENT ON DEVELOPMENT:
There are many people in the West who for various reasons have come so to dislike major institutions of Western society, especially the market economy and its corollaries such as private property, that they regard the radical weakening of these institutions as a major objective of policy. Many of these people, influential in the universities, the mass media and the international organizations, consider the underdeveloped countries as allies, or rather as instruments, in the promotion of their aims.
The real beneficiaries of foreign aid are the international organizations, those who control political power in the recipient countries, those who staff the foreign aid agencies of the giving countries, and the Western professors who advise on economic development schemes. I once served in a state university as the academic replacement for a professor who had just purchased a $60,000 home and gone on an AID mission to India for two years. His pay for his mission to the poor was $30,000 per year plus expenses, and it allowed him to pay off his mortgage on his return. One of his colleagues had gone on a similar mission to South America and bragged to me that he had "salted away $30,000." Such "missions" which let academics save at annual rates of up to twice their normal incomes explain the great popularity among professors of foreign aid and all arguments that justify it. He who hasn't got his yet can hope to in the future. Western taxpayers who are assuaging "guilt" for the poverty of underdeveloped countries are fattening the pocketbooks of others, but the others are not the exploited farmers of West Africa. Indeed, the government-to-government grants that characterize "foreign aid" allow the recipient governments to consolidate and extend their exploitation of their own citizenry. The situation is made even worse by the fact that many of the African government leaders are products of Western universities and have little sympathy for the culture of those they govern.
It is clear that the state marketing monopolies are supported not by the producers whose incomes they confiscate, but by officials of governments and international organizations and their academic handmaids. As the boards came to accumulate huge reserves by exploiting the farmers, price stabilization gradually receded as the argument for their existence. Now it is said that the boards are necessary to raise taxes to finance economic development and to control inflation. In other words, the agricultural producers are going to be imperialized to the end. The marketing boards have even been supported by some on the grounds that they prevented the rise of a kulak class in West Africa, that is, the exploitation of the native producers by their own governments has been supported by some Western intellectuals on the grounds that it was necessary to prevent the emergence of a prosperous peasantry!
No one has explained why the economic development of West Africa should require the exploitation of private farmers, but it is apparent that the exploitative policy of the state monopolies has made private saving and investment by farmers difficult or impossible. The policy has obstructed the development of an African middle class and African private enterprises. The policy has retarded the growth of income of farmers and thereby reduced their demand for manufactured articles. Even more importantly, the policy has retarded the expansion of the production of cash crops and the development of a market system. In addition to these economic consequences, the concentration of power and money in the hands of government has increased the intensity of the political conflicts in Ghana and Nigeria.
The practice of many Western intellectuals of considering the peoples of the underdeveloped world as victims of external factors, especially of colonialism, masks the real imperialists—the state marketing monopolies and the governments that sanction them. Nevertheless, this practice has strong emotional appeal to liberals and enjoys the support of powerful vested interests. The supposed helplessness of people in face of outside forces serves as a basis for the advocacy of far-reaching policies of social engineering. Those who claim to have diagnosed the condition of the alleged victims claim the right and ability to remold the victims and their society. Gunnar Myrdal, for example, in ASIAN DRAMA makes a plea for an all-powerful government dedicated to remaking people and society, and he alleges that the more prosperous persons, groups and countries are responsible for the poverty of the rest.
This results in demagogy against the productive and in the confusion of government with the governed. As a result, the state sector is termed the public sector and is contrasted with the private sector. This is Orwellian. State enterprise is private in the sense that it normally enjoys statutory monopoly, so entry is blocked and the public cannot participate. Private enterprise is open to all and is thereby public.
What has been overlooked is that government has its own interests—interests which are independent of any "public interest" or, for that matter, of any political party. The problem of government entering the economic sector is that it gives government—which is simply one other private interest—too much power over other private interests.
NATIVE GOVERNMENTS TAKE MORE
Since native governments produce less antagonism in their subjects than do colonial governments simply because they are not foreign, native governments can take more from those they govern than can foreign imperialists. It is not conceivable that any colonialist or foreign imperialist could levy taxation on the American population at rates equivalent to those of their present personal and corporate income taxes. And no foreign colonialist today could withhold between one-third and one-half the commercial values of the crops of native African producers. If we take this into account, it is conceivable that the citizens of every country would be better off economically if governed by a foreign imperialist. Indigenous imperialists can get away with more simply because they are indigenous.
Indigenous imperialism has been obscured by an assumption underlying the economic theory of public goods which asserts that governments act not in their own interests but in the interests of others—the "public interest." Economists who use the "public interest" assumption to analyze the state sector simultaneously assume that other organized groups and individuals act in their self-interest. This dichotomy in the economists' assumption about behavior protects indigenous imperialism under the mask of benevolence. The real imperialists go scot free while Western experts on economic development fatten their pocketbooks and West African native farmers are exploited. Economic development is retarded, and the lack of progress is taken as evidence for more foreign aid which further entrenches the power of the indigenous imperialists.
The rationale for the marketing boards is clear. They result from the cult of state power which serves the material interests of a new class of planners, academics, state functionaries, and international civil servants—a class which appropriates the wealth of others under the guise of the "public interest." These salaried do-gooders are the new imperialists.
Paul Craig Roberts has taught economics at Virginia Polytechnic Institute, Tulane University, the University of New Mexico, and Georgetown University. Currently he is a research scholar at the Hoover Institution on War, Revolution and Peace at Stanford University. Dr. Roberts is the author of two books and numerous articles in scholarly and professional journals in the United States and Europe.