In the latest episode of the Explaining History Podcast, I step back from the specific history of Congo to examine the broader theoretical framework of neocolonialism – and how the decline of formal empire prepared the ground for the neoliberal revolution.
The Purpose of Empire
From a Marxist perspective – drawing on Marx, Lenin, J.A. Hobson, and Rosa Luxemburg – the purpose of empire as far as capital is concerned is the pursuit of profits. You’re looking for cheap resources, cheap labour, and captive markets. This has a number of effects on both the imperial core and the periphery.
Britain’s transformation from a middling European kingdom to a global superpower was built on extraction. The opium trade with China – imposed through the Opium Wars – poured staggering wealth into Britain, financing the Royal Navy and the expansion of towns and cities. The slave‑based sugar and cotton economies did the same. And the systematic deindustrialisation of India – turning it from a producer to a consumer state – led to mass impoverishment and famines that killed tens of millions.
The Unravelling of Empire
What happens when empire becomes unsustainable? Britain’s military power during the Second World War was based on its ability to mobilise several million Indian soldiers. But in 1946, when the British tried to put veterans of the Indian National Army on trial, there was widespread revulsion across India – even from men who had fought in the British Army against the INA. The British lost control of the Indian Army, and with it, the ability to monopolise armed force. They knew the game was up.
By the 1950s and 60s, most of Britain’s African colonies were gone. But the flow of wealth from the Global South to the City of London did not stop. It continued through neocolonialism: debt, the Bretton Woods institutions, the IMF, the World Bank, and the General Agreement on Tariffs and Trade (later the WTO). All of these became devastating tools in keeping the Global South poor.
In the 1970s, there was a roaring trade in white mercenaries across Africa – men who thought they could maintain British influence through force. There was a view that imperialism would never take the shape it did in the 19th and early 20th centuries, but that the City of London could still benefit handsomely through a network of neocolonial relations.
The Neoliberal Revolution
And then came neoliberalism. As the returns from empire declined, capitalist elites in the Global North turned inward. They began to cannibalise their own societies – through privatisation, the erosion of welfare states, the breaking of organised labour, and the deregulation of finance.
The neoliberal revolution was, in part, a response to the crisis of empire. When you can no longer extract wealth from the colonies, you extract it from your own people. The mass unemployment of Thatcher’s Britain, the destruction of union power, the sale of public assets – all of this was a way to maintain elite wealth and power when the old imperial structures could no longer deliver.
The purpose of neoliberalism, from a long historical view, was to take the interests of the elite class of the imperial power and maintain them in a time where it became harder and harder to find those ongoing returns through empire.
The Colonial Mindset
Some of the architects of neoliberalism were explicit about their views. They did not think it was necessary to garrison the Global South with European and American soldiers – but they did think it was necessary to intervene to ensure a certain kind of order. Global South countries were there to be producer countries, not consumer countries.
The idea that a country like Bangladesh might raise the price of its rice exports to reduce infant mortality was unacceptable. It would upset the global web of price signals. After the end of the Cold War, some of these arguments became more explicitly eugenic and racial. The thinking was clear: the elites of the Global North had to maintain their grip on the accumulation of wealth and capital, and prevent its democratisation.
The Consequences
The consequences have been ruinous. In Ghana, the promise of independence under Nkrumah was extinguished by a CIA‑backed military coup. In Britain, the social democratic compact that financed the NHS and the welfare state – itself partly paid for by the last flickers of imperial plunder – was dismantled and replaced by a system that cannibalised society itself.
The winner, once again, was financial capital.
Leave a Reply