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Red Theory: What is neo-colonialism?

Analysis by J. Sykes |
September 18, 2022
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Mao Zedong with Kwame Nkrumah.
Mao Zedong with Kwame Nkrumah.

In the previous two articles in this series, we’ve discussed imperialism, or monopoly capitalism, which Lenin called “the last stage of capitalism.” We explained how imperialism and monopoly capitalism are synonymous, the laws of motion inherent in capitalism that lead to imperialism, how imperialism means war, and how imperialism has affected the national question. In our last article, we talked about how and why the contradiction between imperialism and the national liberation movements is the principal contradiction on a world scale. 

In 1916, Lenin wrote, “Imperialism, as the highest stage of capitalism in America and Europe, and later in Asia, took final shape in the period 1898–1914. The Spanish-American War (1898), the Anglo-Boer War (1899–1902), the Russo-Japanese War (1904–05) and the economic crisis in Europe in 1900 are the chief historical landmarks in the new era of world history.”

But imperialism was met everywhere with the resistance of the colonized peoples. In some places, it was thrown off by national liberation movements that won liberation. Where the proletariat has taken power, like in Vietnam, Cuba or China, for example, they have consolidated the gains of their liberation and built socialism. In other countries they have met with challenges to maintain an independent course, as the imperialists have tried to find other ways to keep those countries under their yoke. Why? 

In his 1965 book, Neo-Colonialism: The Last Stage of Imperialism, Kwame Nkrumah writes, “Once a territory has become nominally independent it is no longer possible, as it was in the last century, to reverse the process. Existing colonies may linger on, but no new colonies will be created. In place of colonialism as the main instrument of imperialism we have today neo-colonialism.” 

Nkrumah defines neo-colonialism like this: “The essence of neo-colonialism is that the State which is subject to it is, in theory, independent and has all the outward trappings of international sovereignty. In reality its economic system and thus its political policy is directed from outside.”

The Chinese Communist Party put it this way in the 1963 article “Apologists for Neo-Colonialism”: 

“The facts are clear. After World War II the imperialists have certainly not given up colonialism, but have merely adopted a new form, neo-colonialism. An important characteristic of such neo-colonialism is that the imperialists have been forced to change their old style of direct colonial rule in some areas and to adopt a new style of colonial rule and exploitation by relying on the agents they have selected and trained. The imperialists headed by the United States enslave or control the colonial countries and countries which have already declared their independence by organizing military blocs, setting up military bases, establishing “federations” or “communities”, and fostering puppet regimes. By means of economic “aid” or other forms, they retain these countries as markets for their goods, sources of raw material and outlets for their export of capital, plunder the riches and suck the blood of the people of these countries. Moreover, they use the United Nations as an important tool for interfering in the internal affairs of such countries and for subjecting them to military, economic and cultural aggression. When they are unable to continue their rule over these countries by “peaceful” means, they engineer military coups d’etat, carry out subversion or even resort to direct armed intervention and aggression.”

Another term for this is semi-colonialism, but the meaning is the same. The term, “semi-colonialism,” comes from the Communist International (Comintern), which categorized countries as imperialist, colonial, and semi-colonial, and gave different guidance regarding revolutionary strategy based on that categorization. Typically, a semi-colonial country is characterized by large peasantry, a relatively small proletariat, a significant landlord class, a national bourgeoisie, and a comprador bourgeoisie. The semi-colony is “independent,” formally, but remains dominated by the imperialists in a number of ways.

According to Nkrumah, 

“The methods and form of this direction can take various shapes. For example, in an extreme case the troops of the imperial power may garrison the territory of the neo-colonial State and control the government of it. More often, however, neo-colonialist control is exercised through economic or monetary means. The neo-colonial State may be obliged to take the manufactured products of the imperialist power to the exclusion of competing products from elsewhere. Control over government policy in the neo-colonial State may be secured by payments towards the cost of running the State, by the provision of civil servants in positions where they can dictate policy, and by monetary control over foreign exchange through the imposition of a banking system controlled by the imperial power.”

Most recently we’ve seen this in the form of loans from the imperialist powers, often through an institution like the International Monetary Fund (IMF) or the World Bank. These loans have heavy strings attached, in the form of imposing Structural Adjustment Programs (SAP) upon the recipient as a condition of the loan. These SAPs impose privatization of industry and natural resources, opening them up to foreign capital. They also impose austerity programs, cutting wages and increasing taxes upon the people of the neo-colonial state. The economy is all around liberalized, the legal system made more favorable to capital and more hostile to labor, and all barriers to its super-exploitation by foreign finance capital are removed. 

Imperialist trade agreements like the North American and Central American Free Trade Agreements (NAFTA and CAFTA) impose “free trade zones” to make it easier for U.S. companies to overpower the economies of Mexico and Central America. The domestic comprador bourgeoisie directly benefits, lining their own pockets as the bought-and-paid-for representatives of foreign capital in these countries. 

Often military aid will also be an element of neo-colonialism, as the imperial power uses the military of the neo-colonial country, funded, armed and trained by the imperialists, to carry out proxy wars and counter-insurgency on its behalf. The United States alone has almost 800 military bases spread over 80 countries throughout the world. Through these regional proxies, like Israel or Ukraine, and through the domination of the NATO military alliance, the U.S. can extend its geopolitical hegemony even further. 

All the money pumped into the neo-colonial government not only serves to open those countries up for super-exploitation by the imperialists, but also serves as an outlet for the export of capital by the monopoly capitalists. Nkrumah puts it well when he says, “The result of neo-colonialism is that foreign capital is used for the exploitation rather than for the development of the less developed parts of the world. Investment under neo-colonialism increases rather than decreases the gap between the rich and the poor countries of the world.”

And of course, a government that is unwilling to submit to this control, or that steps out of line, or elects a government unfriendly to the imperialists, faces the very real and constant threat of coups, military intervention, and other forms of regime change. 

In some cases, the imperialists have granted de facto independence as a concession to a liberation struggle, only to transition the newly formed government into neo-colonial domination. In other cases, one imperialist power may encourage and aid an independence movement in order to pull a colony away from the orbit of another imperialist rival, only to dominate the newly independent government as a neo-colony. 

Take for example the Philippines. In Philippine Society and Revolution, Jose Maria Sison argues,

“Though the reactionaries claim that the Philippines is already independent, it is not in fact completely so … The truth is that U.S. imperialism persists in violating the national sovereignty of the Filipino people and in strangulating Philippine independence. Before and after the grant of nominal independence, U.S. imperialism made sure that it would continue to control the Philippine economy, politics, culture, military and foreign relations. It has extorted unequal treaties and one-sided privileges that transgress the national sovereignty, territorial integrity and national patrimony of the Filipino people. U.S. imperialism continues to arrogate unto itself the privilege of giving armed protection to the local exploiting classes. Though there is now the illusion that the present government is self-determining, its basic policies and the election and appointment of its highest officials are mainly determined by U.S. imperialism. The clearest evidence that the Philippines is still a colony of the United States consists of economic enclaves lorded over by U.S. enterprises and also of huge U.S. military bases. These colonial enclaves can be removed only by means of an armed national revolution to assert Philippine independence.”

We see in the socialist countries something different. Because working and oppressed people are in power in those countries, instead of the bourgeoisie, they have, by and large, successfully resisted attempts by the imperialists to reassert their dominance. In some cases, the imperialists were able to orchestrate counter-revolutions and coups, sometimes with the help of opportunists and revisionists within the socialist government. In those cases, those countries have been met with balkanization, “shock therapy,” and terrible declines in their living standards. But in the case of Cuba, Vietnam, China, Laos, and the DPRK, imperialism has failed to regain control. Because the working class controls the commanding heights of the socialist economies of these countries and operates them in a planned way to benefit the people first and foremost, they have been able to develop their productive forces, expand their economies and improve the conditions of their people, while defending themselves from both foreign intervention and economic blackmail from the imperialist powers. 

The move from formal independence to neo-colonialism in any country is a setback for people of the whole world whenever and wherever it occurs. But the absolute and irreconcilable antagonism at the root of the entire imperialist system cannot be papered over by the imperialists and their puppets. Imperialism is a system in decline. The working class here in the United States is becoming more conscious and organized. The socialist countries are on the rise. The national liberation movements are growing in strength, from the Philippines and the Middle East to Latin America. 

As the Communist Party of China said in 1963, “However hard the imperialists disguise their intentions and bestir themselves, however hard their apologists whitewash and help neo-colonialism, imperialism and colonialism cannot escape their doom. The victory of the national liberation revolution is irresistible.”