‘Asiatic Mode of Production’ was, he claimed, stable but stagnant and had no
internal progressive dynamic.
Marx believed that British rule in India destroyed this ‘Asiatic society’ and
created the conditions for industrial capitalism. British colonialism in India, he
wrote, had ‘dissolved those small semi-barbarian communities by blowing up
their economic basis, and thus produced the greatest, and, to speak the truth,
the only social revolution ever heard of in Asia’. This social revolution may
have been ‘actuated only by the vilest interests and was stupid in its manner of
enforcing them’, but ‘whatever may have been the crimes of England, she was
the unconscious tool of history in bringing about the revolution’. Imperialism
left England to ‘fulfil a double mission in India: one destructive the other
regenerating – the annihilation of old Asiatic society, and the laying of the
material foundations of Western society in Asia’ as ‘Modern industry resulting
from the railway system, will dissolve the hereditary divisions of labour, upon
which rests the Indian castes, those decisive impediments to Indian progress
and Indian power’(Warren, 1980).
Though colonialism may have had a progressive impact in laying the foun-
dations of capitalism, the most influential driving force, according to Marx,
was the internal dynamic of capitalism. Capitalism, he argued, has a relentless
tendency to expand, both within and between countries, so if colonialism was
important,trade and openness were even more so. The development of capital-
ism in Western Europe, he wrote, would ‘compel all nations on pain of extinc-
tion to adopt the bourgeois mode of production’, and the ‘country that is more
developed industrially only shows to the less developed, the image of its own
future’(Palma, 1978).
After 1900 Lenin and others brought an analysis of imperialism more
formally into Marxist thought. Lenin argued that imperialism then represented
a new stage of capitalism and was linked to the changing structure of devel-
oped capitalist countries. The formation of joint-stock companies allowed
firms to expand beyond the wealth of a single owner and the constraints of re-
investing only earned profits. The key features of this new stage were the
centralization of industrial capital, growth in the size and independence of
banks (what Lenin called ‘finance capital’), and the export of that finance capi-
tal (distinguished from the export of commodities). Lenin argued that the
monopolization of capitalism led to an exhaustion of investment opportunities
at home and so reduced incentives to innovate. The resulting motives to control
and expand into new global markets prompted colonial expansion. Lenin
retained the traditional Marxist view that the export of capital (and commodi-
ties) would accelerate development in the backward areas. There are numerous
problems with this analysis. Lenin dated the monopolization and export of
finance capital to the 1900s several decades after the rapid colonial takeover of
Africa. According to his schema they should have occurred the other way
round. Germany, rather than the UK and France, had the most concentrated
industrial structure but a much smaller and later colonial empire. Lenin argued
that monopoly capitalism was associated with stagnation in the developed
Colonialism 195