How Prabhat Patnaik “discovers” Marx’s alleged shortcomings in theorising colonialism

by B. Sivaraman

Frontier | January 12, 2018

Alleged omissions by Marx
In an article tilted Marx and Naoroji—The clue to the puzzle of “drain of wealth” that appeared in The Telegraph on 20 December 2017Professor Prabhat Patnaik has listed what in his opinion were major omissions by Marx in respect of colonialism [The said article of Prof Pravat Pattanaik may be seen in the “Links to News & Views”-section].

Patnaik has argued that during 1850s, when Karl Marx was working on his Das Kapital, he was also simultaneously writing columns on British Rule in India for New York Daily Tribune and for both he frequently visited the British Museum library and “despite the fact that he was researching on both themes at the same time, the impact of colonialism on the dynamics of capitalism is conspicuously absent in Capital”.

Patnaik confusing ‘surplus-value’ with ‘surplus’ 
Patnaik goes on to argue that, “the colonies were also important sources of surplus-value, even beyond the stage of primary accumulation of capital; for in such a case not recognizing their role makes the analysis incomplete”.

Here Professor Patnaik commits a category-mistake by confusing ‘surplus-value’ for ‘surplus’. Surplus-value from colonies, if any, could only be a small part of the total colonial surplus extracted which would include surplus extracted in different other forms like continuing primitive accumulation, unequal exchange through trade, taxes on peasants including channelized as tribute from zamindars and princes and high duties on local traders.

If colonies had been important sources of surplus-value when Marx was writing his economic works, then export of capital too might have been substantial but from the figures Lenin cites in his Imperialism, we can make out that export of capital to colonies from UK was insignificant in 1860 and grew substantial only in the second decade after 1900. It is for Patnaik to explain why he expects Marx to write in the 1860s about the development that took place in 2010–20.

Did Marx fail to address in the three volumes of Capital the impact of colonialism on the dynamics of capital in the metropolis?
IN MEGA–II & LONDON NOTEBOOKS
Many hitherto unpublished works of Marx are being published as part of the publication of complete works of Marx-Engels in 114 volumes by MEGA–II in Amsterdam and in 1961–63 Manuscripts among them, Marx says:
“Because we are in a ‘general’ consideration of capital as such, the ‘colonial question’ does not enter into the matter, nor the type of ‘competition’ centre–periphery, that will be analysed later; but it is not denied, not at all, that one has to systematically study it later at a more concrete and complex level (pp. 70ff, 1861–63 Manuscripts, MEGA II).

This means Marx considers capital on a world level at a certain level of abstraction consciously and how correct is it to expect empirical details of colonial question in all his major works?

Professor Patnaik says:
“Indeed what is striking is that neither in Capital nor in the Tribune articles is there any recognition of the extraction of substantial amounts of surplus from the colonies by metropolitan capitalism”.

In 1959, Progress Publishers came out with an anthology of Marx’s works on colonialism titled Marx on Colonialism, which contained very rich information on the extraction of substantial amounts of surplus from the colonies by metropolitan capitalism and Prof. Patnaik can revisit those articles, including those written for New York Daily Tribune, to get an idea that Marx was fully aware of the extent of the drain.

Professor Patnaik sees very little of what Marx says on the impact of colonialism on metropolitan capitalism in three volumes of Capital
“There is very little in all three volumes of Capital about the impact of imperialism on the metropolitan economies” says Prof. Patnaik in a similar write-up in CPI(M) official party organ People’s Democracy [See http://peoplesdemocracy.in/2017/1224_pd/marx-imperialism%5D, which has carried this article without distancing itself from it.

Did Marx really overlook the impact of colonialism/imperialism on metropolitan capital in his three volumes of Capital?

In Chapter 31 of Volume I of Capital, Marx writes:
“The colonies secured a market for the budding manufactures, and, through the monopoly of the market, an increased accumulation. The treasures captured outside Europe by undisguised looting, enslavement, and murder, floated back to the mother-country and were there turned into capital. … Today industrial supremacy implies commercial supremacy. In the period of manufacture properly so called, it is, on the other hand, the commercial supremacy that gives industrial predominance. Hence, the preponderant rôle that the colonial system plays at that time. (p.529) …

In Volume III of Capital, Marx deals with colonial trade:
“Capital invested in foreign trade can yield a higher rate of profit, firstly, because it competes with commodities produced by other countries with less developed production facilities, so that the more advanced country sells its goods above their value, even though still more cheaply than its competitors. … The privileges country receive more labour in exchange for less, even though this difference … is pocketed by a particular class” (pp.344–345).

A little farther down the same para, Marx adds:
“As far as capital invested in the colonies, etc. is concerned, however, the reason why this can yield higher rates of profit is that the profit rate is generally higher there on account of the lower degree of development, and so too is the exploitation of labour, through the use of slaves and coolies, etc. Now there is no reason why the higher rates of profit that capital invested in certain branches yields in this way, and brings home to its country of origin, should not enter into the equalization of the general rate of profit and hence raise this in due proportion, unless monopolies stand in the way”.

Marx doesn’t stop at these two passages. Further down the same section, in p.456, Marx says:
“But this same foreign trade develops the capitalist mode of production· at home, and hence promotes a decline in variable capital as against constant, though it also produces overproduction in relation to the foreign country”.

In fact, for Marx, colonialism not only impacted upon the dynamics of the capitalism in the metropolis to give rise to monopolies and export of capital and thus facilitated the transition to imperialism, it even played a midwife to the transition from feudalism to capitalism in Europe and even enabled them to get qualified as metropolis in the first place:
“The sudden expansion of the world market, the multiplication of commodities in circulation, the competition among the European nations for the seizure of Asiatic products and American treasures, the colonial system, all made a fundamental contribution towards shattering the feudal barriers to production” (Marx, Volume III of Capital)”.

Patnaik cites only one instance which according to him was the sole indication that Marx was aware of the drain of wealth of India. Patnaik quotes a passage from a letter Marx wrote to a Narodnik economist N.F. Danielson on 19 February 1881, two years before his death:
“What the English take from them annually in the form of rent, dividends for railways useless to the Hindus; pensions for military and civil service men, for Afghanistan and other wars, etc., etc. – what they take from them without any equivalent and quite apart from what they appropriate to themselves annually within India, speaking only of the value of the commodities the Indians have gratuitously and annually to send over to England — it amounts to more than the total sum of income of the sixty millions of agricultural and industrial labourers of India! This is a bleeding process, with a vengeance!”

Then Patnaik large-heartedly exonerates Marx partially: “The fact that Marx carried on his analysis on this presumption suggests not that the surplus extracted from the colonies was theoretically inconsequential, but rather that he did not have adequate information about the magnitude of surplus so extracted”.

And then he also offers an explanation for Marx allegedly remaining uninformed: “This is hardly surprising, as the surplus extracted from the colonies of conquest like India (we are not talking here of the colonies of settlement), and siphoned off to the metropolis, would never appear as such”.

Patnaik further adds: “Since the balance of payments must always balance, with the total outflows being matched by total inflows, determining which of the outflows constitutes a siphoning of surplus without any quid pro quo requires judgment as well as a certain amount of detective work. From the official statistics that Marx would have had access to in the British Museum, it would have been impossible for him to get any idea of the outflow of surplus from India to Britain”.

Is it really true that Marx could not have any idea of outflow of surplus from India to Britain? Though Ricardo hinted at unequal exchange through trade, it was Marx who first articulated it clearly that colonial trade was unequal trade and it was an exploitative relation where ‘the privileged country receives more labour in exchange for less and obtains “a surplus profit”’ (Marx, Volume III, Capital, p. 345). This sentence alone is adequate proof Marx would not have remained simply blinded by the official statistics on balance of payments.

How the puzzle is unravelled by speculation
Patnaik poses a puzzle and then he himself answers it with speculation thus: ‘The question that has puzzled many is: how did Marx come to recognize the “drain”, which required specialized knowledge of the Indian accounts under British rule that only someone like Naoroji had come to acquire? Some have speculated that Marx became acquainted with Naoroji and learned from him about this phenomenon, which he mentioned in a letter but had no time to incorporate into his own work. This is not so far-fetched a hypothesis since both Naoroji and Marx had a common friend, H.M. Hyndman of the Social Democratic Federation, in whose house they might have met and discussed the issue’.

Patnaik might be right, or wrong, on this. We have no means of knowing. But now that he has engaged in some speculation, can’t we not take the liberty to engage in some speculation of our own regarding Patnaik’s new discovery of alleged theoretical omission by Marx? Though going into the motive of the author beyond the text is unhealthy in polemics, we can’t resist the temptation to pose one nagging question: In a review of Patnaik’s book A Theory of Imperialism, co-authored with Professor Utsa Patnaik, CT Kurien, his comrade-in-arms in the academia, has described the work as a new theory of imperialism (See New Perception of Imperialism, Review by CT Kurien of ‘A Theory of Imperialism’ by Utsa Patnaik & Prabhat Patnaik, in Frontline, 12 May 2017. Available at http://www.frontline.in/books/new-perception-of-imperialism/article9658344.ece). Without going into the veracity of Patnaik’s claim that it is a new theory, Professor CT Kurien introduces the book and outlines the analysis of Patnaiks based on political geography and spatial analysis of imperialism and the new features of financialisation.

Well, in the last hundred years of its development, imperialism is bound to have thrown up several new features and an analysis of these is most welcome. We don’t dismiss such an analysis offhand. However, whether such an analysis constitutes an altogether a new theory of imperialism is an open question. Of course, Patnaiks are entitled to stake their claim to have developed a new theory on the basis of merits of their analysis. But does Prof. Patnaik think that to substantiate his claim for coming up with a new theory of imperialism he has also to come up with the claim that he was the one to originally come up with a new comprehensive theory of colonialism—including the centre-periphery relationship and the impact of colonialism on the dynamic of capitalism in the metropolis? If so, he would be doing an injustice not only to Marx-Engels and Lenin and numerous other theorists of similar themes, including his elder colleagues in India like NK Chandra and Ranjit Sau, he would also be disappointing a student of Marx like this author.

SOURCE: http://www.frontierweekly.com/views/jan-18/12-1-18-How%20Prabhat%20Patnaik%20discovers%20Marxs%20alleged%20shortcomings.html

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