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Populism and the Global South

14 min read.

In a major analysis of current developments at the level of the world and multinational market of late capitalism, Esteban Mora grapples with the phenomenon of so called ‘right wing populism’ not only in the West, but in Third World regions as well. He asks if Africa’s decades of trauma now confront metropolitan and central capitalist countries, as the road where they are heading.

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Populism and the Global South
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The origins and formation of ‘right-wing populism’ from the point of view of Marxist economics and their impact of these processes for Africa must be understood from observing the world market from an internationalist and multinational point of view.

The policies of ‘right-wing populist’ movements come from the big multinational financial and productive capitals, not from the local national bourgeoisie. This big financial and productive capital has as a goal the elimination of the fragmentation to the concentration and centralization of value, which is being caused by multinational production itself, at least as it has been functioning until now.

In addition, the international bourgeoisie has an understanding of East Asia’s economic ascension, right wing populists see these regions advance in the multinational market (where East Asia is now the centre of industrial production on the planet), as a result of the intervention of the state in the economy.  It is from this characterization (and these goals) that they define themselves as ‘nationalists’ or ‘anti-globalists’, but always within the frame of multinational capital and competition.

Let me illustrate this with a couple of examples.

Both Hungary and Poland, or even Austria, have intensified the economic activity of their sovereign wealth funds or equivalent funds, for the investment of state capitals within their economies. In the same way, Hungary and Poland are characterised by the nationalization of certain companies and assets, and by the great support of the state through state and public subsidies (coming mainly from the structural funds of the European Union, which are composed of state and public European budgets) to subsidize multinational companies and their operations within their countries, as well as social spending in general.

That means it is simply inaccurate to argue that they are ‘protectionists’ or ‘nationalists’ in the classic sense of the 20th century.

So, the convergence of the Viktor Mihály Orbán government in Hungary or the Polish government with certain multinationals is as great as any other globalised economy, but it is focused on state interventionism. It is worth restating the point. These governments see East Asia’s success and the ability to now compete at the multinational level as almost entirely due to their state-led or state-oriented support or intervention. Therefore, these ‘populist’ governments promote this economic perspective to prevent the fragmentation of concentrated and centralised capital.

It is also important to stress that multinationals arriving in different regions and countries, are producing growth and the development of mainly small and medium industrial enterprises. So, in East Asia the overwhelming majority of industrial companies are small and medium sized, instead of factory-scale, and they are vertically integrated through outsourcing or portfolio investment, which means part of the profits stays within those companies and is not automatically ‘repatriated’ to the multinational, in turn this benefits the host country and companies, and creates the possibility that the Asian Tigers, China or India, or even Turkey, Israel or South Africa, of developing multinationals themselves.

Trumps Tariffs and Brexit

Another example comes from Brexit and the trade war between United States and China, provoked by Donald Trump’s tariffs. None of these policies make the slightest economic sense for either the internal markets of England or the United States. The first ones to oppose and criticize Brexit or US commercial tariffs have been precisely the local big, medium and small bourgeois from those countries, for which inputs, raw materials and means of production, as well as exports, are all affected.

While multinational capitals who can produce anywhere in the world remain largely ‘immune’ from these policies. When production was located inside the nation-state, protectionism made sense, but with the internationalisation of the division of labour and multinationals, it can only affect the internal markets and not the companies with production sites all over the world.

Let’s look at these processes in a little more detail. Through tariffs (and Brexit, hard or soft, will produce tariffs for trade between England and the European Union) multinationals accomplish the deterioration of the conditions of production for their respective competitors and at the same time promote the movement of multinational production to regions more favorable to their interests.

This ‘movement’ of multinational production could stop the ‘spill over’ of productivity, knowledge and profits to those centres or possible centres of world production (for example, against China’s growth, in the case of the US trade war). So, we see in this process a way of preventing the fragmentation and competition at the level of the world market. From this follows that American multinationals are moving their productions sites from China to Vietnam or Malaysia, for example.

Again, it has to be stated that it is impossible to understand these policies (both Brexit or American tariffs) without appreciating that they come in part from multinational capital, as a form of intervention in the multinational market, not at the level of nation-states, but at the international and multinational level.

I would argue that we are seeing a shift from commercial freedom characteristic of the World Trade Organization, for example, and the extensive phase of the internationalisation of the division of labour in late capitalism to an intensive phase based on the intervention of the state at the level of the world market. From this follows the resurgence of the state by ‘right-wing populism’, as economic intervention increases the role of the state as a centre or point of concentration of power (which has come to be known as ‘neo-fascism’).

Contradictions, questions and solutions

As I have already argued, the world centre for industrial and high-tech production (in East Asia), is not composed of factory-scale companies or processes, but of small and medium sized companies. In the same vein, the biggest component in intra-regional trade in East Asia, as the industrial centre of the world, is not based on finished products, but intermediate parts and components, which come and go from Vietnam to Malaysia, or from South Korea to China, etc. On top of this, it is the state and sovereign wealth funds, for example, which allow this concentration of power to take place.  From Singapore to Vietnam, each has working mutual funds or wealth funds of different types, and they all have intensified their involvement in the economy in recent years.

All bourgeoisie economic analysis and research on the multinational market from recent years is questioning neoliberal policies, and describing not without surprise, the incredible performance of economies and multinationals where countries have state-led types of policies for their own multinationals (subsidies, trade barriers, lower interest rates, etc), like India or China, and how this seems to be working much better than Western non-interventionism for the growth and rise of those countries. This change in perspective is a change in bourgeoisie consciousness, in the face of the incredible ascension of Asia as a real competitor, and the possibility of reproducing the same success in the West through the same state-oriented policies (from which wealth funds are just one example).

Poland and Hungary are not the only European countries expanding production through state funds, but we see the same processes from Turkey or from Persian Gulf states, or even India and China. Turkey’s president Recep Tayyip Erdoğan recently formed the first sovereign fund in the country, under his own personal management. Similar processes can be seen in Gulf States, with funds under the control of their royal families, or under Hussein el-Sisi and the state-military elite who are in charge of Egypt’s industrial sector.

Even Jair Bolsonaro’s Brasil has immediately focused on pension funds reform, which would allow private investment through those funds, just as we have seen in Austria, Hungary or Poland where state funds are starting to invest in the private and multinational sectors.

We need to remember that even though the US and UK still maintain hegemony in terms of the financial control of assets at the multinational level (demonstrated in Gerard Duménil and Dominique Lévy’s 2018 book), it is the Chinese financial sector which surpasses the Triad in terms of revenue and profits; they may control fewer assets, but are producing the largest revenues of all and China is doing this through exactly these types of sovereign funds. By ‘Triad’ I mean the three historically dominate centres of the world economy from the late 1940s until the end of the 20th century: the United States, the European Union and Japan.

How do these wealth funds work? Wealth funds are very similar to bank capital, which is the definitive characteristic of financial capitalism. But the difference is that it is not based on dividends, and you don’t need to work around stocks and dividends from specific companies, but you can participate on the ‘pool’ of financial assets invested in different companies all at once, getting a percentage of total profits or revenues controlled by the wealth fund.

This allows for a faster way of diversification and centralization of profits and value, even more resolutely than bank capital in some senses. Instead of a stock which represents a percentage of the profits for a single company, etc, the percentage you own on a wealth fund is equal to a percentage of the profits not only for one company, but for all the profits from all companies the wealth fund finances all at once.

‘Right wing populism’ or ‘nationalism’ has meant a turn to the state and its financial assets and capabilities, in stark contrast with neoliberalism, where all talk was about a minimal state.  It is crucial to point out the historic discrepancy between neoliberal ideology (that states that the state should not interfere with markets) and the neoliberal political projects and practices (that actually reshapes the state, assigning to it clear fields of action, private property right protection, fiscal incentives, privatisation of the public etc.)

Alain Lipietz (1997) actually studies how job deregulation and reduction of the state’s involvement is stronger in the Triad, where the flexibilization occurs at the level of the job market and not the internal productive process, and the opposite happens in the Global South: the state is more involved comparatively (although there are also examples of privatization, structural adjustment programs, etc, in Africa or Asia!), the flexibilization occurs at the internal level of the production process, and not at the level of the job market which is highly organized and centralized, etc.

The same process where sovereign wealth funds from the Global South turn into competitors at the multinational level,is at play when multinational production fragments itself into small and medium companies through ‘spill overs’: state-led economies perform better in the world market by subsidizing their multinationals. Equally sovereign funds from countries with state-led economies have the biggest concentration and centralization of financial assets.

The consensus among bourgeoisie economists is that state subsidizing of multinationals is the reason for the Asian miracle, and the reason they even entered the multinational market in the first place. This means an intensified competition, both for the market and the state. The whole Huawei controversy or the trade negotiation between the US and China over state subsidies, show the motives and the purpose of ‘right wing populism’.

This explains the convergence of libertarianism with conservative statism in the United States, where Trump erases regulations at the same time as his administration applies tariffs.  It may also explain the United Kingdom’s Tory government’s announcement of the end of austerity, and the possibility of state planning.

Falling profit rates

These processes, I would argue, can only be explained by the fall in the profit rate (and its different multiple causes) within multinational companies, which makes it impossible for multinationals to simply buy up companies and integrate them vertically as their own. The companies are instead forced to reduce costs through outsourcing, in combination with ‘offshoring.’ The state, in this situation, turns into a point of comparative and relatively high concentration of capitals, compared to the reigning fragmentation throughout the rest of the economy, where the rate of profit keeps falling, or where the economy continues to fragment into small and medium companies.

This explains the historical rise of sovereign and wealth funds in peripheral economies of the South, allowing them to become real competitors at the multinational level against the Triad. It is these processes that force or propel the formation of this ‘right-wing populist, ‘anti-globalist’ or ‘nationalist’ movements.

Of course, state intervention or fragmentation are not the real causes of East Asia’s rise nor of the increasing competition at the multinational level. From a Marxist point of view, the historical fall in the profit rate hits the Triad and developed countries the hardest, in terms of its expanded reproduction. Why? In Marxist terms this is because of a bigger organic composition: more expensive equipment and raw materials (constant capital) compared to the labor component (variable capital), which causes the fall in the profit rate itself.

The process is relatively simple: if profit is derived from what is extracted from ‘the labour component’, it is in the economies of the Triad with a high concentration of constant capital that we see profit rates in a historical, downward spiral. The difference between the profit rate and the accumulation rate (gross investment) is considerably smaller than in peripheral or underdeveloped countries.

As the 20th century Polish revolutionary and Marxist economist Henryk Grossman explained, even if the profit rate falls immediately after the organic composition of capital rises, it can maintain itself above the accumulation rate and sustain expanded reproduction, but only for a while.  After a certain period, the profit rate will be inferior to the accumulation rate, and this is where troubles begin: expanded reproduction needs to be held back, which is precisely what neoliberalism is.

Instead of big investments and rising wages to augment profits and productivity, we see the opposite: the cutting costs rationale, and the reduction of real wages.  In peripheral or underdeveloped countries, constant capital was cheaper, and so organic composition was lower and profit rates higher. This allows for extended reproduction to have more space to develop in peripheral countries instead of in the Triad.

As it has been shown, the fall in the profit rate works with different causes, specifically the exploitation rate, the unemployment rate and the new value rate in conjunction with the financial variable (the reduction in the financial profit rate), to create crises (See Carchedi, 2017).

These issues are of such vital importance to capitalist development that they must be explained carefully. The difference between the profit and accumulation rate was greater, so peripheral countries were suddenly in the position of sustaining expanded reproduction, as we have seen in the Asian Tigers or China and India, while the Triad had to immerse itself in the cutting-costs rationale of neoliberalism to hold back expanded reproduction. This is the crux that explains East Asia’s resurgence against the West today, in Marxist terms. Just as neoliberalism is not the cause of the crisis, rather the reaction by the bourgeoisie to the reality of the historical fall in the rate of profit since 1973/4, so ‘right-wing populism’ is a reaction against the consequences (state interventionism and fragmentation at the multinational market level) of that very same historical process.

The processes at work in the Global South

The internationalisation of the division of labour of late capitalism integrated the bourgeoisie of the Global South not only into the financial aspect of imperialism, but into its multinational aspect, through the emerging industrialisation of areas of the South. This took place through the so-called ‘Taylorism’ and ‘peripheral fordism’, as Alain Lipietz’s described it in 1997.

This caused the political erasure of the so-called progressive bourgeoisie in the South, which also eliminated the conflict between anti-colonialist ‘bourgeois’ movements from the Third World and the Triad. It was a huge triumph for the Triad’s class project to have finally eliminated this faction al conflict between anti-colonial layers of the bourgeoisie from the South and themselves.

It eliminated reformist, social democratic and import-substitution programs in the South, precisely because industrialisation was now realised by multinationals, instead of their own nationalistic and anti-colonial projects and at the same time integrating them within the circuits of multinational capitalism.

The internationalisation of the division of labour of late capitalism first defined by Ernest Mandel, seems to have had two different stages: an expansionist stage, with the conglomerates boom of the 1950’s and 1960’s, and the industrialisation and vertical integration of productive processes all around the world.

Today we enter a stage where expanded reproduction shrinks or contracts (due to the fall in the rate of profit), and multinationals stop integrating vertically in the classic and strict sense, and decide to outsource or seek portfolio investments as the main way to diversification.

Portfolio investments are different from Foreign Direct Investment and vertical integration in the sense that they allow for the Southern bourgeoisie to stop being simply passive investors, and allows them to start to behave like active investors, integrated not only as minority partners of multinationals, but as members of the multinationals themselves.

The first stage of the internationalisation of the division of labour saw the Southern bourgeoisie’s integration into financial capital in a passive way, but the end of the expansive phase of late capitalism has allowed them to turn this relationship upside down: the Triad’s bourgeoisie turns into passive investor, and the South has taken charge and control of the multinational means of production.

These processes have seen the integration of the anti-colonialist class faction of the South, into the industrial and multinational class faction of the multinational Triad over the last forty years. This has also changed the character of the Southern bourgeoisie from a simple ‘comprador’ class, into a managerial multinational faction (not a new class, as Duménil and Lévy argued in 2018) which deals and controls directly in the businesses of the Triads multinationals.

The Southern bourgeoisie is still a ‘small partner’ of the Triad or what Paul Baran described in the 1960s as the lumpen-bourgeoisie, but instead of a nation-state bourgeoisie, which produces for its own internal market, or trades the imports and exports of its internal economy, or produces agricultural products, etc, it now controls the means of production of major multinational assets. In a word, the South’s bourgeoisie has stopped producing for its internal market only, and started to produce for multinationals.

If we follow Karl Marx’s work, The 18th Brumaire of Louis Bonaparte, there are two contradictory tendencies here: the absorption of the Southern bourgeoisie into a single international class (with all of the unevenness and dependency that continues to characterize this class), and at the same time, the revulsion based on the increasing competition this multinational integration produces.

This means the international bourgeoisie moves from away from the conflict that characterised 20th century anticolonialism and industrialisation/import-substitution, to act as a unified faction or class under the financially dominant faction of the global class. At the same time, it integrates heterogeneous factions into multinational competition, acting not as a dominant minority faction, but as an entire class.

This contradiction between governing as a faction or as a class, explains precisely the mixture of fascistic characteristics, and democratic and republican elements.  If you govern as a whole class, you govern through parliamentary and democratic dialogue on how to run society. If you govern as a particular faction among others, you will try to impose your faction’s view on the others, and rule above your own class. The internationalisation of the division of labour in late capitalism, eliminating the internal factional conflict between the Triad and the Third World, creating at the same time an intensification of competition and control from multinational capitals seem to be explained by this enormous historical development.

These processes explains the entire political climate and movement to the right, and the virtual disappearance of a progressive bourgeois element from Central America to Africa itself – the transition from progressive (bourgeois) struggles to the so-called neoliberal age. This represents an intensification of the class struggle between a more compact international bourgeois class, and a proletariat with a smattering of allies in parliaments or in mainstream political parties.

Finally, to Africa

For Africa, this divergence in expanded reproduction related to the fall in the profit rate – which produces the phenomenon I have just described – has enabled the economic ‘boom’, just as it facilitated peripheral countries on the continent attempting to transform themselves into Asian Tigers, or to see the so-called BRICS as a vehicle to their development and growth, etc.

It does not mean that profit rates have not fallen in Africa or other peripheral countries, it rather means peripheral countries, because of their own underdevelopment, can expand reproduction more decisively than their central and metropolitan counterparts.

This demonstrates how capitalism feeds off ‘backwardness’ itself.  We should remember as well, that the so-called economic ‘boom’ in Africa has not translated into the improvements in the lives of peasants and workers, rather the improvement of the economic figures for certain extractive companies on the continent. The boom in GDP growth rates has not translated into higher living standards for workers and the poor on the continent.

At the same time, Africa has something very valuable to teach to the rest of the world: Africa, more than any other continent, thanks to its fragmentation of land and smaller commercial integration, knows very well what it means when the state is in relative terms, a bigger point of concentration of capitals compared to private merchant or financial capitals. Just like in Asia or Latin America, the state in Africa turns into a great possibility for the bourgeoisie to accumulate bigger sums of capital quickly, and dispose of them in any way they want, if they have the state-power to do so.

Like sovereign wealth funds today, Africa knows what it means for the state itself to turn into a medium for capitalist enrichment and profit making, and not a neutral ‘people’s state’ which eliminates class contradictions. This turns the fight (even the electoral fight) for the state into a bitter struggle of factions, which, as we know, has already led to disastrous scenarios (from civil wars, to total state repression) or to apparently ‘progressive scenarios’ – until recently Ethiopia was the poster-boy of this ‘success’ – which hides exactly the same process of using the state and state-funds to finance private and multinational production.

At the beginning of his administration, Trump was accused of wanting to turn the US into a ‘Third World strong-man government’, which besides the racist undertones of the comment, was essentially correct. The concentration of power in the state, plus the concentration of specifically economic power in the state, which seems to be the characteristic of ‘right wing populism’, is indeed very common to us here in the so called ’Third World’ – with the fragmented character of agriculture, land tenure, and commercial integration, etc.

Africa understands this world better than others, since the continent has a long history of seizures of state power in order to control the economic concentration and centralization of state budgets, assets and capitals.

At the end of this short essay I should repeat myself: ‘right wing populism’ shows how capitalism feeds off backwardness. The cheapest solution for multinational companies is to control the state in order to stall falling production (a movement very similar to the international bank and state budgets bailouts that happened during the 2008 crisis). The world may now be facing Africa’s recent history. Do Africa’s decades of trauma confront metropolitan and central countries, as the road where they are now heading?

This article was first published in the Review of African Political Economy Journal.

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Esteban Mora is a researcher in Communications Science from the Universidad de Costa Rica, he has written books on capitalism and Marxism, and writes a Marxist economics blog.

Ideas

The Roaming of Colonial Phantoms and a History of Resource Plunder

Since colonization, Africa has provided its best raw materials for the global North. Can countries finally break this pattern?

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The Roaming of Colonial Phantoms and a History of Resource Plunder
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The struggle for control over Africa’s natural resources has raged since the colonization of the continent. It continues today as the forces that undermine Africa shift from the former colonizers to transnational corporations, and the ideology that underpins the global economic order morphs from blunt “flag” colonialism to the hegemony of neoliberalism. The effect is still the same: the underdevelopment of African economies and undermining of state capacity to meet peoples’ needs. The following unpacks the roots of this persisting problem and offers some lessons from the early post-independence era, when governments across Africa recognized these issues clearly and enacted revolutionary policies to confront them.

Prior to colonialism, the countries of Africa were economically, politically, and sociologically structured organically around their internal needs and demands, meeting internal material and social challenges. This is not to say these societies were devoid of internal contradictions, conflicts between them, or engagement with the wider world––indeed, trade routes certainly extended beyond the continent. But on the whole, the economic structures and relationships that developed were shaped by dynamics and demands within African societies.

This was forcefully upended with the onset of colonialism, as African economies were extroverted, destroyed, and fragmented. A new structure was put in place in which African economies were inserted in the global economic order as providers of raw materials for the development of other countries––basically for imperial Europe. This has relegated the vast majority of the continent to a political economy structure of primary commodity export dependence.

Within this structure, African countries became dependent on the export of a small basket of barely processed minerals, timber, and agricultural products (cocoa, coffee, bananas, etc.) as raw materials to feed the industries of the global North. In return, Africa became dependent for their consumption needs on the import of the goods manufactured in the North, most often made using African raw materials.

This enforced “unequal exchange” of unprocessed so-called “low-value” raw materials for “high-value” processed goods has become the basic mechanism of unequal economic relationships between Africa and the advanced industrial capitalist North, and the means of continued appropriation of the wealth created in Africa by the North. This undermines the accumulation of wealth in Africa and its reinvestment for renewing, upgrading, and expanding productive capabilities of the societies on the continent, and therefore of their ability to meet the changing needs of the people. On the contrary, African countries and opportunities for their people have become trapped in the vicissitudes of the global market for their commodities over which they have little control.

The colonial restructuring of Africa’s economies and their orientation to the external needs of European industrialization have devastating consequences for the internal dynamics of the economies and the societies, marked by two key features:

First, as products which were before used and processed for an internal economy came to serve merely as unprocessed raw materials for Europe, the internal usage of these products was subverted. Iron, which was processed into agricultural tools and other mechanical tools, was now mined only to be carted out in raw form. Agricultural products which before were processed in wide-ranging forms for food, clothes, shoes, were now only exported in their raw forms. As a result, the chain of processes, skills, and knowledge of these products and their uses through the domestic economy was broken. Instead of being maintained and upgraded over time, the capabilities and capacity have become degraded.

Second, the relationships that existed between different types of economic activity and “sectors” of the economy were fragmented. The chain of mining, smelting, and crafting iron to supply the technological need of agriculture, such as tools for farmers, was fragmented during the colonial economy. Agricultural supplies to iron crafters were also equally disrupted. This shifted the overall nature of African economies so that these sectors no longer met the needs of and reinforced one another, helped each other grow, or evolved according to African needs.

As different sectors of the economy were no longer “speaking to each other,” the range of internal exchanges became limited and the overall economy became more shallow and weaker. For instance, farmers who now only sold their products to an external (North) market didn’t necessarily have an internal market for their products so that they could also expand their production and opportunities for livelihood. This led to a common belief that African countries have small markets, erroneously attributed to small national populations, and that there is simply nothing that can be done about it. But contrast this with global North countries such as the Netherlands or Denmark: their populations are smaller than many African countries, but because of the coherence in their economies they are able to have a deeper domestic market which allows for expanded production. Their economies were not fragmented and reoriented in the same way.

Such internal fragmentation and consequent shallowness of the African economy is aggravated by the artificial borders inherited from colonialism. Before colonialism, what now constitutes the national border between Ghana and Togo was a common space of economic interaction among societies. By being forced to operate behind new artificial borders also limits the range of exchange and economic depth.

Historically, the mining sector has been the focal as well as entry point for the construction of the primary commodity export dependent political economy. From South Africa to Zimbabwe to Ghana, colonization was consolidated as a process of European companies, supported by their governments, exercising possession and ownership of Africa’s minerals and expropriating the locals. This was replicated as more minerals were discovered in addition to gold, diamond, coal, and oil, and every time a new mineral is demanded by the global North, this dynamic is asserted anew.

However, primary commodity export dependence is not simply a reduction to the specific mineral or agricultural or other natural resources involved. Rather, it is the totality of relationships and dynamics of the appropriation of wealth, the extroversion of the economic dynamics, and fragmentation of African economies. This allows us to see how these dynamics extend beyond natural resources to other economic sectors, such as tourism, telecommunications, and finance. In tourism, for example, it is widely known that the higher end of the value-chain is dominated by a handful of transnational operators, who then appropriate the overwhelming bulk of the wealth generated, leaving Africans little out of it.

In this neoliberal era, the problem of primary commodity export dependence has been ignored at best and celebrated at worst. Promoted first by neoliberal economists and North policy institutions, an insidious narrative has proliferated that African countries should rely on their “comparative advantage,” recommending that they make better and more efficient use of their export of primary commodities. The power of this narrative has ensured that the transformation of primary commodity export dependence and its attendant problems as outlined above has ceased to be a central aspect of African policy making in the neoliberal period.

Echoing the neoliberal suppression of policies aimed at dismantling primary commodity export dependence, at the onset of neoliberalism the World Bank told African governments to abandon any notion to use mineral resources to serve social priorities or developmental priorities, and give up their running and management of minerals and mineral wealth to transnational companies. As the Bank stated:

The recovery of the mining sector in Africa will require a shift in government objectives towards a primary objective of maximizing tax revenues from mining over the long term, rather than pursuing other economic or political objectives such as control of resources or enhancement of employment. This objective will be best achieved by a new policy emphasis whereby governments focus on industry regulation and promotion and private companies take the lead in operating, managing and owning mineral enterprises.

Paradoxically, even the revenue from the export of primary commodities has been undercut through World Bank-promoted programs of lowering corporate taxes and royalties, and giving many concessions and incentives to transnational mining companies in the name of attracting foreign investment.

Many of the best tools to fight against dependency, such as development planning and import-substitution-industrialization, have either been actively repressed by programs like structural adjustment, or pushed into the margins by the dominance of neoliberal thought and “free market” policymaking practices. These tools were widely deployed by early post-independence governments to assert sovereignty over natural resources, before they were truncated by neoliberalism, which has reasserted extractive colonial dynamics.

In the early post-independence period, after formal decolonization, there was wide recognition from governments, across Africa and across ideologies, that the key task for development was to confront primary commodity dependence and its binding economic constraints. Kwame Nkrumah recognized the problem clearly in stating: “Africa is a paradox which illustrates and highlights neo-colonialism. Her earth is rich, yet the products that come from above and below the soil continue to enrich, not Africans predominantly, but groups and individuals who operate to Africa’s impoverishment.”

This recognition across the continent and the global South reverberated into mainstream policy institutions established in this era, such as the UN Conference on Trade and Development Planning or the African Institute for Development Planning. A key lesson from this era is the critical importance of restoring this recognition of the structure of African economies as a starting point for policy and activism.

Early post-independence governments worked to ensure that their economies accumulated for themselves by taking over the commanding heights of the economy strategically. This required asserting sovereignty, and therefore control, over their natural resources. The key mechanism for this was vesting the mineral wealth of their economies in the state. In Ghana, for instance, laws were implemented to declare that the mineral wealth or the wealth under the soil is vested in the Republic of Ghana and, it is the president who has custodianship.

Crucially, this nationalization extended beyond minerals to the mines themselves, even those already constructed. Taxation and royalties were also implemented to fund development and social programs, and the transfer of skills and technology was carefully facilitated.

Early post-independence leaders also saw beyond the hard economics of natural resource sovereignty to recognize its social dimensions. For instance, Kwame Nkrumah bought British mineral mines, which the UK had wanted to close as they did not make any profit. It came as a surprise to many that Nkrumah would purchase unprofitable mines, but his goal was not simple profit, but to create jobs as a social act to expand employment opportunities for the people.

This understanding of the social dimensions of dependency is key for the Post-Colonialisms Today project, as feminist politics is a central pillar. The basic recognition of dependency and its social dimensions, and the need to assert African agency over resources, provides a stronger basis to ensure power and agency for African women. At the same time, post-independence leaders must be critiqued for their patriarchal policies and tendency to sideline African women after independence despite their prominent role in anti-colonial struggles.

The early post-independence era also offers lessons on confronting the fragmentation of African economies. Their approach centered on industrialization: building African capacity to meet Africa’s needs rather than rely on the North to import high-value products.The key challenge many governments faced was generating the resources to support industrialization. Profits from exports from producing primary commodities were leveraged to support building factories, establishing institutional mechanisms, and funding social policies. The widespread use of tools such as the taxation of transnational corporations, protective tariffs, and royalties also generated resources.

However, a deeper problem often remained even as important efforts towards transformation were funded and planned: restoring internal linkages to African economies and making different sectors “speak” to each other once again. This challenge is particularly difficult and one many post-independence governments did not tackle sufficiently. As Post-Colonialisms Today researcher Akua Britum details, post-independence governments had to explore methods for funding development beyond taxation, such as reinforcing social programs to meet workers’ needs without reliance on large cash incomes.

Some countries paid particular attention to restoring these linkages. Post-independence Botswana, for instance, enacted policies to ensure the processing of minerals mined in the country must take place, at least in part, domestically. They also insisted that the procurement of inputs for mining must be sourced in Botswana. This meant that while the economy was temporarily reliant on producing minerals, they could still build up their industrial capacity and promote structural transformation.

There are limitations and layers of complexity to approaches in the post-independence era though: as Post-Colonialisms Today researchers Kareem Megahed and Omar Ghannam point out, post-independence land distribution in Egypt from landowning elite to the peasant class was reversed as peasants only received flimsy usufruct ownership. Under Kenneth Kaunda, Zambia nationalized their mines but still remained deeply controlled by international mineral value chains, meaning that even though they owned the copper mines outright, transnational copper companies managed to undermine their capacity.

Both the strengths and limitations of early post-independence policies offer a wealth of lessons for today’s struggles for control over Africa’s resources. Critically, the clarity in that period around the importance of African state control over natural resources offers a path forward for contemporary efforts––it must be wrestled away from transnational corporations today just as it was wrestled from colonial forces. With basic policies such as nationalization being halted outright, as seen recently in Zambia, this task remains as urgent as ever.

This article is part of the “Reclaiming Africa’s Early Post-Independence History” series from Post-Colonialisms Today (PCT), a research and advocacy project of activist-intellectuals on the continent, working to recapture progressive thought and policies from early post-independence Africa to address contemporary development challenges. It is adapted from a recent webinar on natural resource sovereignty which you can listen to here. Sign up for updates on the project here.

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The Imperialist Soul of Social Democrats

Alfie Hancox writes how the apparently progressive post-war government in the UK which delivered unprecedented social security simultaneously undermined progressive political futures in the Global South – national liberation movements for land and resource sovereignty were thwarted. Hancox reveals Labour’s Aneurin Bevan’s role in deepening British imperialism.

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The Imperialist Soul of Social Democrats
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The working-class vision of socialism during this period may be blurred by the corruption of the ‘welfare state’—Kwame Nkrumah

As the popular national story goes, after the Second World War the British working class, seeking a just reward for their sacrifices, came together to win a fairer society by voting in the Labour government which built the welfare state. At the heart of this reputed ‘Spirit of ‘45’ was the architect of the National Health Service (NHS), Aneurin ‘Nye’ Bevan (1897–1960). Bevan has pride of place in the romanticised pantheon of the Labour left, and he is widely held to epitomise the party’s ‘socialist soul’. While often memorialised as a class warrior who once called for ‘the complete political extinction of the Tory Party’, behind ‘the myth of the miner prophet’ there lies a much more complex and contradictory picture of Bevan the statesman.

Britain’s post-war welfare settlement emerged against the backdrop of negotiated decolonisation – which was by no means a peaceful or straightforward process – and class compromise within the bounds of the capitalist nation-state was mediated by an enduring relationship with Empire. For Bevan, socialism was above all a ‘language of priorities’, and a critical overview of his parliamentary career reveals that colonised peoples in Africa, Asia and the Caribbean were often a subordinate element in his considerations, despite his long-standing friendship with Indian independence leader Jawaharlal Nehru.

It is also often forgotten that the welfare state was serviced by a migrant workforce extracted from Britain’s colonial ‘dependencies’, who were greeted upon arrival with racial-exclusionary impulses which were at times reinforced by Bevan himself. Similar ‘nativist’ tendencies remained present in the recent social democratic revival, demonstrating the need for an interrogation of the traditional Labour movement’s entanglement with imperialism.

The welfare state as neocolonial compact

Social welfare reforms delivered by the state have a contradictory class character. On the one hand, they constitute immediate gains for workers, but at the same time they assist in the reproduction of a value-creating labour force and represent concessions which may boost the legitimacy of capitalism. Welfare measures thus play a mediatory function in the push and pull of class struggle, the surge forward and the reactive containment. Interwar Britain was not wholly immunised from the social convulsions that shook continental Europe, and one wartime Conservative Member of Parliament warned in a famous speech: ‘If you do not give the people social reform, they are going to give you social revolution.’

The reforming Labour government of 1945–51 adopted a carrot and stick approach to class compromise, as the expansion of social housing and public education, and advent of free healthcare, was accompanied with a consolidation of workplace discipline. Bevan claimed to have received his political training in Marxism, but his true faith was in parliamentary democracy, and he believed that national industrial management laid the foundations for the construction of socialism ‘from above’. As a member of Clement Attlee’s Ministerial Emergencies Committee, the erstwhile trade union militant helped defeat a strike wave in the newly nationalised industries (a response to efficiency drives), using the Supply and Transport Organisation which two decades earlier helped beat back the General Strike of 1926.

Britain’s post-war welfare settlement emerged against the backdrop of negotiated decolonisation – which was by no means a peaceful or straightforward process – and class compromise within the bounds of the capitalist nation-state was mediated by an enduring relationship with Empire

While welfare concessions reflect the domestic class balance of forces, this is only one part of the story. As the British New Left historian John Saville identified in 1957, ‘the flexibility and manoeuvrability of the ruling class’ in charting a new social consensus had ‘been derived from the possession of the world’s largest Empire.’ It was this situation which enabled the Labour government to square the circle of maintaining (relative) class peace at home, without eliminating capitalist exploitation. The Pan-Africanist Kwame Nkrumah, in his seminal 1965 study Neo-Colonialism, explained how the governing elite in Europe and North America found a means to deal with social demands at home after the war:

A deliberate attempt was made to divert colonial earnings from the wealthy class and use them instead generally to finance the ‘Welfare State’ … this was the method consciously adopted even by those working-class leaders who had before the war regarded the colonial peoples as their natural allies against their capitalist enemies at home.

Immediately following the war, Britain was facing a currency balances crisis that called Labour’s social plans into question. Bevan was not explicit about where the money for Attlee’s ‘New Jerusalem’ would come from, but his colleague Evelyn John Strachey, a former Marxist and Labour’s Minister of Food, was more forthright. During a parliamentary debate on a Colonial Development bill in 1948, the year of the NHS’s founding, Strachey concluded that ‘by hook or by crook, the development of primary production of all sorts, in the Colonial areas, Colonial territories and dependent areas in the Commonwealth … is, it is hardly too much to say, a life and death matter for the economy of this country.’

A deliberate attempt was made to divert colonial earnings from the wealthy class and use them instead generally to finance the ‘Welfare State’ … this was the method consciously adopted even by those working-class leaders who had before the war regarded the colonial peoples as their natural allies against their capitalist enemies at home.

The Attlee government essentially pursued a policy of issuing ‘IOUs’ to the colonies in return for the dollars earned from key exports such as rubber and tin from Malaya and cocoa from Ghana. Britain’s post-war reconstruction employed ‘a more systematic exploitation of colonies than at any previous time in imperial history’ – with the active support of the labour bureaucracy. The trade union leader, Ernest Bevin, declared: ‘I am not prepared to sacrifice the British empire [because] it would mean that the standard of life of our constituents would fall considerably.’ As the Trinidadian Marxist George Padmore put it, these labour lieutenants of imperialism wanted to turn the British working class into collective ‘shareholders of the Empire.’

British socialism’s civilising mission

Writing in the socialist newspaper Morning Starthe trade unionist and historian Graham Stevenson has attempted to defend the legacy of the welfare state, and detach it from Attlee’s imperialist adventures in Korea, Malaya and Iran, by arguing that ‘foreign policy was not in Nye Bevan’s remit’. It is well known, however, that Bevan had wanted the Colonial Office, and he was an influential voice in international affairs as the charismatic leader of the ‘soft left’ Tribune faction.

Though Bevan’s rejection of the pre-war colonial status quo did put him at variance with the Labour right, he nevertheless stressed he was ‘against any proposal for complete self-government’ until the colonised countries had endured sufficient tutelage under British parliamentary democracy. He believed in the civilising mission of the ‘Socialist Commonwealth’, and in 1948 declared that with the advent of the National Health Service Britain had achieved ‘the moral leadership of the world’. This paternalistic mindset, which smacked of the ‘white man’s burden’, was typical of the ethical socialist tradition in Labour, and distanced Bevan from the approach of the Comintern-affiliated League Against Imperialism and the Manchester Pan-African Congress, which both rejected the ‘Enlightened’ colonial doctrine of trusteeship.

Bevan never challenged the unequal economic relationship with the ‘dependencies’ which characterised Britain’s free trade imperialism, or what he preferred to call ‘the legitimate claims of world commerce’. The superior British capacity for ethicizing self-interest was shared by Bevan’s wife and fellow MP Jennie Lee, who said at Labour’s annual conference in 1956, without a hint of irony: ‘We have to work for the day when there will be a higher standard of living here, a higher standard of living in the colonies, and when as free and friendly nations they will want us to be their bankers.’

It was in his attitudes to the Middle East that Bevan’s more overtly imperialist leanings came to the fore. While opposing the Anglo-French invasion of Egypt, Bevan nonetheless expressed his outrage when President Gamel Abdel Nasser, who he racistly dubbed ‘Ali Baba’, nationalised the Suez Canal used to transport ‘our oil’. In justifying the Zionist colonial project that violently displaced 700,000 Palestinians, Bevan also argued in the Cabinet that ‘it was not necessarily true that we must avoid estranging Arab states. A friendly Jewish state would be a safer military base than any we should find in any Arab state’. He thought that Europeanised Jewish settlers could shake up the ‘semi-medieval institutions’ of the Arab world and prepare the grounds for socialist democracy, betraying a racialised view of civilisational development.

Bevan’s wavering stance on colonial liberation didn’t make him an outlier on the Labour left. For example, it was the former treasurer of the Movement for Colonial Freedom, Anthony Greenwood, who as Labour’s Colonial Secretary oversaw the ousting of British Guinea (Guyana)’s socialist Premier Cheddi Jagan. The Communist Party theoretician Rajani Palme Dutt identified this tried and test pattern of western social democracy, whereby ostensibly left-wing spokespersons are ‘given positions in the imperialist machine such as would not only gag them from expressing anti-imperialist sentiments but compel them to undertake the official duty of defending imperialist policies’.

As the British New Left historian John Saville identified in 1957, ‘the flexibility and manoeuvrability of the ruling class’ in charting a new social consensus had ‘been derived from the possession of the world’s largest Empire

Ultimately, the government that delivered unprecedented social security at home simultaneously thwarted progressive political futures in the Global South – national liberation movements for land and resource sovereignty, and regionalist aspirations like those fleetingly concretised in Nkrumah’s Union of African States. Labour’s inglorious colonial record came up one time when Bevan was lecturing the Conservatives on their imperial policy. When he mentioned the imprisonment of Nkrumah, Tory members opposite reminded him that the Attlee government he served in as Health Minister was responsible! Bevan brushed this off, replying: ‘Well, we shoved him in gaol. If honourable members will restrain their hilarity for a moment, I said that this is part of the classic story of these struggles.’ This glib response omitted the killing of unarmed protestors in Ghana, which took place months before the arrest of Nkrumah. The West African Students’ Union, of which Dr. Nkrumah was a former member, noted that US imperialism often appeared a lesser threat to colonial independence than ‘British Socialism’.

An additional pillar of Attlee’s foreign policy was the backing of Western Europe’s remilitarisation under the US Marshall Plan, enabling the British Communist Party to declare that Labour’s welfare state was really a ‘warfare state’. Before WWII, Bevan had alienated the Labour leadership by calling for a United Front with communists against the fascist threat in Europe. However, his sympathies had changed with the onset of the Cold War, as anti-colonial movements supported by the Soviet Union destabilised the hegemony of the western imperial powers; and the Bevanites became enmeshed in an ideological struggle pitting Occidental social democracy against Marxism-Leninism. Bevan’s 1951 ‘rebellion’ against Labour’s militarism was not a protest against the genocidal proportions of the Korean War – he had in fact fully supported the Anglo-American invasion of the Peninsula – but because bloated defence spending was now cutting into his health service.

Empire and the National Health

The welfare state also carried the imprint of Empire domestically. While healthcare is a basic social necessity, historically the state provisioning of medical services has been framed in terms of labour productivity and, from the late-nineteenth century, imperialist ideologies of racial hygiene. The Liberal economist William Beveridge’s 1942 blueprint for the welfare settlement recommended that ‘good stock should be allowed to breed while bad stock would be ameliorated through state intervention’, and similar eugenics-influenced sentiments permeated the Labour movement through the Fabian Society.

The nationalisation policies in 1945–51 were not in any meaningful sense socialist, being administered from above by the capitalist state. While Bevan described the National Health Service as ‘pure socialism’, it was compromised from the start by the continued existence of independent contractors and retention of private practice. Nevertheless, the post-war reforms were a step forward in terms of collective social security, and they boosted loyalty to the nation-state that administered them: welfare came ‘wrapped in the Union Jack’. The language of socialism was co-opted and degraded by what Tom Nairn termed Labour’s ‘nationalization of class’, and lost in the process of the patriotic social compact were the Marxist values of working class self-empowerment.

Notions of national belonging and entitlement in Britain became increasingly racialised after the war, and as Satnam Virdee reminds us, the apogee of British social democracy ‘was also the golden age of white supremacy [and] legal racist discrimination’. When migrant workers from the non-white ‘New Commonwealth’ were induced to bolster Britain’s public services and stagnating industries, they were met with a racist ‘colour bar’ in employment and housing, often reinforced by the white-dominated trade unions. In 1948, a year that saw violent attacks on Black residents in Liverpool, Bevan wrote that if ‘colonial subjects come here on their own responsibility’ they ‘cannot complain if it is not all plain sailing’.

An informal caste system was built into the NHS itself, with workers of colour restricted to the lowest-paid employment grades, regardless of their level of training. A Brixton-based Black feminist group described how the health service was like a colony in the way it was run: ‘in the head of the black nurse from the Caribbean is the echo of slavery; in the head of the Asian nurse is the servitude to Sahib and Memsahib.’ Britain was simultaneously draining skilled medical labour from developing countries, the effects of which were described in Walter Rodney’s How Europe Underdeveloped Africa. The hyper-exploited labour of Black and Brown women was unacknowledged by Bevan, who ascribed the NHS’s success to ‘the vitality and genius of the British people’.

Healthcare was quickly propelled to the centre of popular anti-immigrant discourses, and only a year after the NHS’s inception Bevan succumbed to nativist pressures by assuring voters that he’d ‘arranged for immigration officers to turn back aliens who were coming to this country to secure benefits off the Health Service’. The image of non-British ‘foreigners’ exploiting the NHS was a trope later deployed to great effect by Conservative MP Enoch Powell in his infamous ‘Rivers of Blood’ speech.

The welfare state also carried the imprint of Empire domestically. While healthcare is a basic social necessity, historically the state provisioning of medical services has been framed in terms of labour productivity and, from the late-nineteenth century, imperialist ideologies of racial hygiene.

Bevan’s capitulation reflected a failure to offer a principled counter to anti-immigration rhetoric. His celebrated essay ‘In Place of Fear: A Free Health Service’ was riven by a tension between the defence of ‘the collective principle’ in terms of socialist universalism, and a cost-benefit approach that stressed immigrants’ contributions to ‘national revenues’, and the expenses that would be incurred by passport checks at hospitals. When Bevan rebuked the Trades Union Congress’s call for immigration restrictions after the 1958 racist riot in Notting Hill, this was not on grounds of proletarian internationalism, but the potential damage it would do to the image of the Commonwealth as ‘the greatest constitutional experiment in the history of nations’.

The legacy of Empire persists in the health service today, as demonstrated by the revival of medical racism in the Coronavirus context. The NHS is also still dependent on the labour of precarious migrant workers, now extracted from developing countries such as the Philippines and Nigeria. The present struggle to defend healthcare services in Britain thus needs to be coupled with a historical awareness of the inherent dangers of seeking social reform within the confines of the imperialist nation-state. We should look beyond the elitist parliamentary socialism of Bevan, to the alternative politics of metropolitan anti-colonialists like Dutt and Padmore who sought not a class settlement within the parameters of capitalist competition, but the levelling of wages and conditions across national and racial boundaries. The experiences of the 1970s–1980s further demonstrated that rank-and-file struggles in the health sector, often instigated by low-paid Black ancillary workers, can galvanise the labour movement in a profoundly progressive manner. We can draw on these lessons, and reconnect with more radical, worker and patient-driven visions of socialist healthcare which target the social roots of ill-health intrinsic to capitalist exploitation.

This article was first published in the Review of African Political Economy Journal.

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Neocolonial Components of Algorithmic Capitalism in Africa Today

More than half a century after Kwame Nkrumah first articulated his magisterial critique of neocolonialism, Scott Timcke argues his critique remains just as relevant in the analysis of present-day developments of capitalism in Africa.

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Neocolonial Components of Algorithmic Capitalism in Africa Today
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The present convergence of finance and wireless technology has generated considerable enthusiasm in development circles about the promise of connectivity and FinTech to improve quality of life and create wealth on the African continent. The prototypical example that proponents point to is M-Pesa, a service run in Kenya by Safaricom. Launched in 2007, M-Pesa is a form of mobile banking which uses cellphone accounts as a financial service, permitting transfers and credit extension facilities. Initially funded by the United Kingdom’s Department for International Development (DFID), the service was commercialized through a joint venture by Vodafone and Safaricom.

By 2018 there were 30 million customers and 6 billion yearly transactions. By most assessments, the service is a success. This blogpost revisits that conclusion by asking how these kinds of FinTech technologies, in their current configuration, perpetuate neocolonial relations. Replacing direct military rule, neocolonial relations can be understood as the coordinated exploitation of developing countries by advanced capitalist ones through their clout in international political economy. If such a claim at first appears like a stretch because it appears conspiratorial, it is worth recalling how European imperial and colonial practices were naturalized and normalized for most of modernity.

While ‘the methods of neo-colonialists are subtle and varied’ let us begin with the obvious. Desires to ‘bring Africa online’ in the 2000s had to confront stark realities born from both (i) the legacies of colonial infrastructure planned primarily to support resource extraction or settler communities, and (ii) the IMF imposed structural adjustment policies that slashed state maintenance budgets and social, economic, and political infrastructure. So, when digital neo-modernization advocates maintained that without access to the internet people in the Global South would face a digital divide which would exacerbate poverty that stemmed from the already asymmetrical relations in the global system, they overlooked the very history that gave rise to those inequalities and deficiencies in the first place. But this rhetoric of digital inclusion tended to overlook the historical materialist method at the heart of discussions about digital inequalities. Indeed the ‘connectivity paradigm’ currently promoted by the World Economic Forum and Facebook focuses on building infrastructure to create markets and customers, which will bridge the digital divide. However, this conceptualization ignores the insights of the scholarship around uneven and combined development or the research on the spatial fix required by capitalism to stall social problems in metropoles. In other words, for all the discussion about connectivity when digital neo-modernizers deny the connections of history; they deny how some polities are rich because others are poor.

Take the case of rising household over-indebtedness mediated by micro-lending platforms like M-Pesa. Sociological studies of the working-class in Kenya, like that by Kevin Donovan and Emma Park, demonstrate how these digitally mediated financial markets create debt traps for this class. In effect their earnings are used to pay off debts and more loans are taken against future earnings to service existing debts. This digitally mediated indebtedness of the working class is facilitated by the combination of the increase in the volume of rents extracted in the modern financial economy as well as, crucially, analysis of user generated data to assess their creditworthiness. In short, social reproduction is articulated through the logic of this financial system in turn causing severe maldistribution. Through this employment of FinTech ‘poverty is understood as a new frontier for profit-making and accumulation.’ These are the kinds of processes that Dan Kotliar and Abeba Birhane have in mind when they write about data orientalism and the algorithmic colonization of Africa respectively.

While the excellent critical literature on FinTech in Africa is growing, too often this work is lost in the analytical (and political) noise of neo-modernization. As the connectivity paradigm illustrates, this ideology has a naïve comprehension of technology as a social form. By contrast, when approached from a critical perspective, FinTech is not confined to reconfiguring or extending new services. Rather it involves creating new markets, introducing new machinery to reduce labor costs and more generally aiding inter-sector competition. But most importantly, FinTech is concerned with enclosing and capturing the value in existing informal lending practices the African working class has already built themselves. For example, South African informal saving networks are estimated to hold US$3 billion. To put it another way, the purpose of FinTech is to readjust the balance of power between capital and labor. This means that the central issue is not about the outcomes this technology produces, nor is it even a matter of access. The fundamental question is about how control rights of this technology reside with a minority of shareholders and how their interests are adjacent to the interests of their firms’ customers. And through indebtedness, FinTech is effectively creating a ‘digital-creditor-debtor-divide’ in Africa.

There is considerable value in revisiting Kwame Nkrumah’s Neo-Colonialism, the Last Stage of Imperialism to understand the neocolonial components of algorithmic capitalism (informational or cybernetic capitalism). Published in 1965 and written in the wake of British Prime Minister Harold Macmillan’s 1960s Wind of Change speech in the Parliament of South Africa in which the Conservative British government signaled that is would no longer actively oppose independence movements, neocolonialism as Nkrumah described it, was a technique of indirect rule kept in place through a combination of economic arrangements and treaties, innovations in communication technology, and with the assistance of local sympathetic agents. In short, Nkrumah argued that European politicians like Macmillan and Charles de Gaulle offered disingenuous statements about the formal end of colonial rule, in part because newer mechanisms of colonial exploitation were possible to implement.

As a quick illustration of the durability of neocolonialism as a form of imperial rule, consider how, sixty years after formal political independence, the CFA franc has kept former French colonies under the influence of France monetary policy and structuring the economic relationship between France and these former colonies. Fanny Pigeaud and Ndongo Samba Sylla’s recently published Africa’s Last Colonial Currency concretely shows how 162 million people in 15 states have France mediate their monetary policy. When paired with the frequent military interventions that still take place, as Nkrumah accounted for, African populations continue to be subjects of scientific and financial experimentation by global powers.

Even reviewing Nkrumah’s sequence of chapters gives an early indication of the larger argumentation and stakes of his thesis. “Exercised through economic or monetary means” and “by a consortium of financial interests” imperialist finance and its currencies enable capitalists to establish corporations dedicated to extracting raw materials from concessions. By pressing labor—whose wages are artificially depressed through monopoly in economic sectors and the monopsony of labor (a market situation in which there is only one buyer) like in many African extractive economies—the profits of which are repatriated to metropoles through monetary zones and foreign banks. Indeed, at the time the book even caught the eye of the CIA in November of 1965. Nkrumah’s government would not last even four more months. It was deposed in February 1966 by a military coup. While it is difficult to adequately discuss Ghanaian politics in the 1960s in this venue (and more generally we must resist mono-causal explanations) it is nevertheless telling that Nkrumah’s removal set in motion a ‘diplomatic realignment’ that benefited the West.

Indeed, it is this kind of protracted material struggle between oppressor and oppressed that gave rise to the neocolonial critique. In the 1989 edition of The Black Jacobins, CLR James included an appendix ‘From Toussaint L’Ouverture to Fidel Castro’ in which he writes that about the intellectual encounter between the West Indians like Marcus Garvey and George Padmore and Africans like Jomo Kenyatta and Kwame Nkrumah. Calling this “one of the strangest stories in any period of history”, James described how encounters between sets of migrants in European cities led to the formation of groups like the International African Service Bureau, as Theo Williams has previously discussed on roape.net. Being in metropoles these Pan-Africanists had front row seats to witness the transition from ‘the old colonial system’  that had stood since the 1884-1885 Berlin Conference to ‘neocolonialism’ that emerged after World War Two. Through their ‘criticism of the weapon’—to employ a line from Marx’s Critique of Hegel’s Philosophy of Right—the Pan-Africans made their theory ‘a material force.’

While there are several tendencies in African studies, neocolonialism and neo-modernization represent two divergent conceptualizations of actions occurring on the continent. Despite protestations otherwise, neo-modernization is institutionally, philanthropically, and academically entrenched. It provides the initial frame of reference for design of empirical studies. And it is precisely “because they have already established a near monopoly of what is written on the subject” to enroll some of Walter Rodney’s remarks, that space is made for the neocolonial critique. This critique can, for example, show how local intermediaries facilitate neocolonial rule. Walter Rodney called these local agents’ allegiance to, or cynical cooperation with neocolonial powers, part of the ‘elementary conditions’ of neocolonial rule. For example, as it applies to algorithmic capitalism, the Kenyan government owns 35% of Safaricom. This means that the state gains revenues from the indebtedness of its citizens and the commodification of their data that Donovan and Park describe. But here arises a contradiction, because these revenues may be offset by costs spent to address the social consequences of indebtedness like homeless and mental illness. Indeed, depending upon their mandate, parts of the Kenyan bureaucracy are likely working at cross purposes from one another. This adds conflicting interests to any intra-governmental discussions on how (or if) to regulate lending apps like M-Pesa.

To recap, aside from the skews and parameters that arise from internal properties, it is true that there is nothing intrinsically exploitative about digital technology. That said, due to the global supremacy of the private property regime, the meaning and operation of these digital infrastructures is overdetermined by capitalist values. Accordingly, using neocolonialism in studies of digital sociology can help us focus less on the mechanisms of this or that platform, and more on how platforms are part of the basic forms of a society that shape social relations. In this vein, neocolonialism provides a different methodology—a counter-narrative that foregrounds the experience of the oppressed—that comes to vastly different conclusions to the neo-modernization perpetuated in the elite ‘fintech-philanthropy-development complex’.

This complex promotes platforms to advance economic liberalization and skirting existing regulations believing that such policy courses can nominally improve material conditions for Africans. However, in practice due to platform mediated financialization setting up conditions of perpetual insolvency, the lived-experience of the African working class is delimited by the interests of metropolitan capital, an arrangement that is reminiscent of the same kinds of subordination that Nkrumah described in the latter half of the 20th century. Much like in the 20th century this most recent iteration of neocolonialism will have long reverberations.

This article was first published in the Review of African Political Economy Journal.

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