Papers submitted to the Bertrand Russell Centenary Symposium, Linz, Austria. September 7th to 15th, 1972.
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The black-white divide has long haunted the United States as a driving force behind social inequality. Yet, the civil ri
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Spheres of Influence and The Third World
Papers submitted to the Bertrand Russell Centenary Symposium, Linz, Austria. September 7 7Fh to 15th, 7972.
Vladimir Dedijer Bipan Chandra Malcolm Caldwell James F. Petras, H. Michael Eris ran, Charles Mills Edward W. Said
Spokesman Books 1973
Published by the Bertrand Russell Peace Foundation, Bertrand Russell House,
Ga noble Street, Nottingham. NG? 4ET. for The Spokesman. Copyright e
The Spokesman 1973.
Printed by The Russell Press Ltd., Nottingham (TU).
The Evolution of the Concept of Spheres of Influence Vladimir Dedijer Modern India, Imperialism and the Great Powers Bipan Chandra
Maritime South East Asia Malcolm Caldwell
The Monroe Doctrine and U.S. Hegemony in Latin America .James F. Petras, H. Michael Eris ran, Charles Mills United States Policy and the Conflict of Powers in the Middle East Edward W. Said
These papers were all published in the Spokesman, nos. 26/27, which appeared in the Summer of 1973. Since this number of the journal is now out of print, we have reprinted its contents in this form in order to ensure that the continuous demand for these articles can be satisfied.
Editorial Board, The Spokesman
The papers which follow are a further small selection from those which were submitted to the Bertrand Russell Centenary Symposium on Spheres of influence in the Age of Imperialism, which was held under the auspices of the Vienna Institute for Development at Linz, in
September 1972. The first seleM appeared in The Spokesman numbers 24/25 in late 1972, which immediately went out of print and was reprinted as a paperback book under the title "Spheres of Influence in the Age of imperialism" (Spokesman Books, £1.2*5i. -The first selection 'featured texts on the theory of imperialism, on contradictions in states with socialist constitutions and on two aspects of American imperialism in its earliest and latest phases. ....
The further selection presented here indicates the range of the Symposium. Vladimir Dedijer's seminal introductory paper, tracing the development of the concept of spheres of influence in the modern age of imperialism, will remain indispensable to future historians able to develop
this theme fully. The remaining papers in this volume illustrate the spheres of influence policies of great powers in much of the third world. Bipan Chandra discusses colonial India's experience as an object of imperial control and its relationship to the later development of independent Indian capitalism. Malcolm Caldwell's study of maritime South
East Asia considers the economic and military impact of successive powers -- Holland, Britain, the United States and Japan - against a background of revolutionary liberation struggles. The comprehensive survey of 150 years of the Monroe Doctrine by James F. Petras and his colleagues is a study in the power, rhetoric and policy options servicing Washington's continuing hegemony in Latin America. Edward W. Said's paper on the United States and the Middle East shows the complexity of modern spheres-of-influence
command of US policymakers.
struggles and the vast resources at the
The Evolution of the Concept of Spheres of Influence
The institution of spheres of influence is not the product of our civilization. It was practised among states from the earliest stages of recorded history. Yet it has increased its hold in the modern age of imperialism, ever since the European powers undertook expansion to conquer other continents. The treaties concerning spheres of influence, as they have been concluded in modern times, contain elements of explicit inequality among nations, proclaiming the principle that some states are destined to be subjects of international relations and the other states and nations mere objects whose destinies
are decided by great powers without their participation in these decisions and against their basic interests. When progressive world public opinion rose against such an open expression of inequality between nations, great powers continued the conclusion of treaties of spheres of influence, with the means of secret, black diplomacy, hiding its content not only from the other great powers but often from their own parliaiNents.
1. The definition of the term and the methodology employed in this comParative study. Historians who are working on a comparative history of legal institutions are aware of the danger of interpretation of legal expressions used in the relevant prel 9 t h century and the l 9th century
treaties and documents in terms of our Vladimir Dediier, the Yugoslav Partisan leader and historiara, was President
sions of' the Bertrand Russel? War Crimes Tribunal and Chairman of the Ling Symposium.
present day international legal vocabulary.
The evolution of the concept of spheres of influence cannot be discussed
only in the abstract, only as a part of the history of legal institutions, because, in the last analysis, the legal aspect of life is
only one aspect of life, itself a part of the ideological one. We must carefully examine the conditions of social life in order to evaluate their relative importance and their effects, both on an international scale and within each of the states concerned, in order to comprehend the whole historical process in all its aspects. The driving forces of imperialism change
at certain stages of history establishing a new balance of power which is always reflected in the rules regulating each other's hunting grounds. These rules defining the spheres of influence of the imperialist powers became embodied in International Law. This achievement of legal status serves to perpetuate inequalities and injustices on a world scale, and also to extend their ideological credibility. The leading British expert on International Law, Oppenheirn, in his work International Law, describes the institution of spheres o f influence in the following manner: "The uncertainty of the extent of an occupation, and the tendency of every
colonizing State to extend its occupation constantly and gradually into the interior, or 'hinterland', of an occupied territory, led several States with colonies in Africa to secure for themselves 'spheres of influence' by international treaties with other interested Powers. 'Spheres of influence' is therefore the description of territory exclusively reserved for future occupation by a Power which has effectively occupied adjoining territories. In this way disputes may be avoided for the future, and the interested Powers can gradually extend their sovereignty over vast territories without coming into conflict with other Powers."1
Although Oppcnheirn's definition of spheres of influence was retained in the eighth edition of his Manual, published in 1952, it is obvious that it did not take into consideration the evolution of International Law or the social conditions in existence. His definition is quite clearly idea logically motivated, reflecting the concepts of International Law in the period of capitalist expansion of the 19th century, when it was described as the law of "Christian nations" or the law of "civilized nations". After 1945, International Law at least formally accepted the principle of universality, admitting as its subjects not only the European states and some great powers from other continents, like the USA and Japan, but many nominally independent nations which proclaimed their independence after the dismantling of the British, the French, the Dutch, the Spanish and the Belgian Empires. Many jurists argue that spheres of influence are no longer institutions of International Law, but really relics of history belonging to the arsenal of a colonialism that has ended forever and has no modern successor. The jurisprudence of the Soviet Union, for instance, takes the following
attitude : "Spheres of influence (spheres of interest) are the territory of a dependent country in which an imperialistic state has a free hand to achieve economic or
THE CONCEPT OF SPI-IERES OF INFL UENCE
political expansion. In the 19th century and at the beginning of the 20th century, the establishment of spheres of influence, as one form of subjugation of dependent countries, usually was hidden by the claims of the negotiated 'agreement' with the countries which entered into spheres of influence, or by the agreements of the imperialist powers of mutual recognition of superior interests of each of the parties to these treaties on a given territory. For the first time the term spheres of influence was accepted in the second half of the 19th century in connection with the division of Africa among European powers. Great Britain concluded a treaty on spheres of influence with Portugal in 1890, with Germany in 1886 and 1890, with Italy in 1891, with France in 1898, dividing the territory of Africa into 'spheres of influence' (leading de facto into the cession of these territories). At the end of the war between .Japan and China in 1894-1895, imperialist powers Uapan, England, Germany and others) divided Ghina into spheres of influence. After the Second World War of 1939-1945, with the growth of national liberation movements in the formerly dependent nations, sphere's of influence as an institution of International Law became a thing of the past".
Unlike Soviet jurists, the Yugoslav expert on International Law (a member of the United Nations International Law Commission) Professor Milan Bartos, in his Treatise on International Law, maintains the view that there is an underlying continuity of spheres of influence, despite the evolution of International Law, the creation of the United Nations Charter and the United Nations Organization, despite the new elements in human history, and the appearance of new social systems. His opinion is that all states, regardless of their internal social orders and ideologies, have been entering into treaties of spheres of influence, the objects of which are wider and more extensive than those of earlier periods of history. Professor Bartos describes "spheres of influence" as "territories which
belong to given states, but in which another state obtains the right, on the basis of an international agreement, to exercise its influence, in economic, political or some other form. The policy of spheres of influence is a reflection of the tendencies of great powers to solve all international issues among themselves, even those dealing with the future of small. but formally independent states. The derivation ol` this policy
is the constant drive of great powers to dominate smaller states. Throughout the 19th century great European powers divided among themselves whole regions, deciding in a sovereign way the fate of smaller nations."8' Professor Bartos maintains "that in the Second World War the great Allied powers entered into agreements concerning their respective spheres of influence which have a distinctive imperialist character, and
the Soviet Union, despite its pretensions of being a socialist country, took part in the conclusion of these treaties as an equal partner. In Professor Bartos's definition of Spheres of influence the an-
other new element. He states "that not only great powers but also other powers could enter into agreements on spheres of influence, although on a smaller scale than the great powers."5 Later I shall speak about some concrete historical cases of imperialist actions by small countries: the secret agreements in 191.2 between Serbia, Bulgaria and Greece for the division of the territory inhabited by Macedonians, or the many secret agreements of the Balkan monarchs for carving up Albania. There is a marked disagreement between the views of Soviet jurists and those of Professor Bartos, as to whether the Allied powers entered into treaties of spheres of influence during the Second World War, or not. This disagreement exemplifies one of the key methodological issues of our essay: the difficulty of access to primary historical sources on the basis of which we make our analysis and final judgments. As we come to the concrete analysis of each historical period, and o f each important agreement between great powers, I shall give my views on the outside and inside identification of the key historical documents. I am also well aware of a danger threatening scholars. Some of them are ready all-too-often to put on the academic gown of scholarly in~ dependence in order to evade their duties as concerned human beings and intellectuals, in the face of the obvious injustices of our time. They keep their mouths shut. Yet it is hard to be at once the actor and writer of one's own drama. We do not have all the available documents upon which t o base judge~ merits, and we are subjected to the force of our own prejudices. Do we see the whole historical process or do we need distance in order to observe it better?
In is true that there have been times in our modern history when honest popular governments and individuals with disturbed consciences published secret documents from contemporary history- One of the most famous cases wa s the decision of the Soviet Workers' and Peasants' government on November 8, 1917, to announce in the Decree on Peace that it would proceed immediately "to the full publication of the secret treaties ratified or concluded by the government of landlords and capitalists during the period March to November 7, 1917." Thus for the first time the world learned the contents of the secret agreements of all Allied powers in the First World War about the realignment of spheres of in~ fluence, annexations and other ignominious war aims of the London, Paris, Rome and St- Petersburg governments.
In our own time no government has been honest enough to publish its secret treaties, but courageous individuals like Daniel Ellsberg have taken the initiative (and the risk) to acquaint the public opinion of their
T H E CONCEPT OF SPHERES OF I N F L UENCE
country and the world with the contents of the secret Pentagon papers.
This man of conscience has thoroughly unmasked the imperialist policies of his own ruling class-in the U.S.A. It is a pity there are no
Daniel Ellsbergs within the borders of other great powers. How shall we now judge, as historians, President Nixon's current talks in Peking and Moscow as far as Indochina is concerned? What
documents do we have at our disposal on which t o base our opinions? Could we make j u d g m e n t s on the basis of the reaction of Peking and Moscow to President Nixon's blockade of the Vietnamese ports, and the increased bombing? How could we interpret the Hanoi press, which emphasized the need for the Vietnamese people to continue the struggle until the final victory, and their opposition to any global diplomacy at
their expense? What exactly do we know of the amount of weapons and other aid given by the Soviet Union and China to Vietnam? To what extent is there truth in the caricature of Le Monde of late May, 1972, showing President Nixon in Moscow with big bags of dollars behind his back and Leonid Brezhnev, o n the other side, with a tethered Vietnamese behind his? There is, on the other hand, the statement given by Prince Norodorn Sihanouk to Reuters on September 4, 1972, "that there had been a new agreement between the Soviet Union and China for the
trans-shipment of Soviet war materials through China to North Vietnam, to offset American mining and blockading of North Vietnamese ports and the renewed bombing campaign of the United States". On the basis of this information, I obviously cannot, as a historian,
enter into serious analysis of whether or not some kind of new agreements involving a division of spheres of influence in Indochina and other parts of the world were made between the USA, the USSR and
the People's Republic of China. This does not mean for a moment that I a m taking a passive attitude towards the struggle of the peoples of Indochina against American im-
perialism. Indeed, I have recently joined .Jean-Paul Sartre and Laurent Schwartz, in our capacities as presidents of the Bertrand Russell War
Crimes Tribunal, in issuing an open appeal on .June 5, 1972, calling upon the governments of the Soviet Union and the People's Republic of
China to suspend their differences for the purpose of helping the peoples of Indochina in the crucial hour of their struggle. At the same time, we proposed that the Tribunal explore the possibility of conducting a n investigation of President Nixon and other leading American commanders and diplomats i n order to determine the degree of their individual res-
ponsibility for the new wave of war crimes being committed by US forces in Indochina. But there is another fact of life, on the basis of which I could draw
the serious conclusion that secret diplomacy is still flourishing in our time. I talked with Bertrand Russell, before his death, about mobilizing progressive world public opinion against secret diplomacy. Lenin, in his Decree on Peace, on November 8, 1917, stated in the name of "the Workers' and Peasants' government created by the revolution of October 24-25 and backed by the Soviets of Workers', Soldiers' and Peasants' Deputies" that the Soviet government "abolishes secret diplomacy and, for its part, expresses its firm determination t o conduct all negotiations quite openly before the whole There is not a single government that will say all it thinks. We, however, are opposed to secret diplomacy and will act openly in the eyes o l t h e whole-peoplc.? Under the pressure of masses all round the world, even the League of Nations had to take some measures against secret diplomacy. Article 18 of the Covenant reads as follows: Q
"Every treaty or in ternational engagement entered into hereafter by any Member of the League shall be forthwith registered with the Secretariat and shall as soon as possible be published by it. No such treaty or international agreement or engagement shall be binding until so registered."
The jurists of that time acclaimed this article of the Covenant as "the beginning of a new era in the conduct of international relations". Yet, the realities of life showed through in the double standard of the conduct of the powers - secret diplomacy continued t o flourish. In the controversy between the Soviet jurists and Professor Bartos over the issue of the current existence of the institution of spheres of influence, the most important factor for me is that I cannot possibly accept the view that the United Nations Charter has automatically erased all the vital features of classical International Law. The Law of the United Nations was not built in a vacuum, but on pre-1941 International Law with all its elements of inequality among the states and popular movements. As we shall see later, even the Charter itself contains unresolved controversies concerning the very principle of the
sovereign equality of all its members. That the legal aspect is only one factor of international life, and that the application of it is quite different, has been demonstrated by many well known facts. I am going to quote only one, relevant to our topic. The United Nations Charter took steps to ban secret diplomacy, as the best and most effective means of making treaties of spheres of influence, and other similar acts of power politics. In its Article 1 0 2 on the registration and publication of treaties, it went much further than the Covenant of the League of Nations in its Article 18. Article 102 of the United Nations Charter reads as follows:
THE CONCEPT OF SPHERES OF [ N F L UENCE
"I. Every treaty and every international agreement entered into by any Member of the United Nations after the present Charter comes into force shall as
soon as possible be registered with the Secretariat and published by it. 2. No party to any such treaty or international agreement which has not been registered in accordance with the brovisions of paragraph 1 of this Article may invoke that treaty or agreement before and organ of the United Nations."
But when I was in Geneva recently listening to the discussions of the United Nations International Law Commission, I read the document pre~ pared by th.e Secretariat of the Commission stating that for the last few years the practice of registration and publication of international agreements had almost ceased. For a historian this is marked proof that the practice of secret diplomacy is being applied as before. Therefore, in this paper I will endeavour to trace the evolution of the institution of spheres of influence in all its aspects in the age of irnperial~ ism, following the already established pcriodization of the history of imperialism. I will not go into details of all general factors, as well as of all objective economic factors of' the history of imperialism. Nevertheless, I shall concentrate on some objective political factors, as expressed in the balance of power in the epoch of superpowers, the mutual agreements between the contracting parties of spheres of influence or not trespassing in each others' hunting grounds, and on the new substance of spheres of in fluence, and political, economic and ideological elements in them. I should not overlook some legal aspects, which have deeper implieations. Dealing with the objects of spheres of influence I will point out their marked increase as historical fact. The victims of spheres of influence are not, as in the beginning of European colonial expansion, confined to people outside Europe, but
now include some of the former great powers who themselves, for eenturies, practiced the politics of spheres of influence. Among the objects of spheres of influence l include not only states, but also popular movements, which are in t h e process of creating their own state organization. A special emphasis will be given to the process of evolution of former
objects of spheres of influence into subjects who determine their own destiny. Spheres
of z`nj'Zuence as territorium
With the development i t productive forces and the intensification of
the division of l a b o r at the end of the 15th and the beginning of the 16th centuries, history witnessed the appearance of wider market economies, and bigger cities in Italy, France, Spain, Portugal, Britain,
VLADIM IR DEDIJER
Holland and Germany. Within feudal society the new bourgeoisie was gaining power and asking for a centralized state, which could guarantee the protection of a common national market. Between different states strong competition was growing for foreign markets, especially outside the European Continent.
Ever since that time the area in which this competition began has expanded, as European
powers penetrated into new parts of the world. At the same time, despite the many wars they fought among themselves for supremacy, in periods of relative truce these .powers tried to establish certain common rules of b e h a v i o r . I n that sense one can accept Oppenheim's view "that the modern International Law of Nations is a product of Christian civilization. It originally arose between the States of Christendom only, and for hundreds of
years was confined to these States$16. No doubt this concept was influenced by Roman Law. The Romans regard their laws as valid only in the territory under the rule of the Roman Empire, within the Pax Romania. All other people outside this area were regarded as barbarians and therefore they were outside Roman Law. The treaties of spheres of influence concluded at the beginning of the history of European colonial expansion, at the end of the 15th century, are at the same time one of the oldest institutions of International Law of the age of colonialism and imperialism. As Lindley states, "the principle that lands inhabited by infidels were open to acquisition by Christians, was acted upon b y the European Powers in extending their dominion over the lands that were discovered in the 15th and 16th centuries. This principle shows itself in the papal bulls. Thus in 1452, Nicholas V accorded to Alphonse of Portugal the
right to attack, subjugate and reduce to perpetual servitude the Saracens, pagans and other enemies of Christ: and the well-known Bull Inter Cuetem of Alexander VI, granting to Ferdinand and Isabella the exclusive right of acquiring dominion in the New World, is limited to lands which were not actually possessed by any Christian King of Prince before l.4l98, and it requires Ferdinand and Isabella to lead the inhabitants to the Christian faith All these territories, although in some cases inhabited by highly cul-
tured peoples, like the Aztecs and the Incas, were called te1*°rz'torz°urn
nullius, meaning that they were the objects of treaties of European
powers. These treaties of spheres of influence were rriade between European
colonial powers from the end of the 15th century until the end of the 19th century, when the whole globe was divided among imperialistic powers.
THE CONCEPT OF SPIIERES OF INFLUENCE
The first treaty of this type was concluded in 1479, when the Crowns of Spain and Portugal made a treaty with a provision that the right of traffic and discovery on the west coast of Africa was reserved to the Portuguese, who in turn assigned all their claims on the Canary Islands to Spain, which conquered the last of these islands i n 1495, sixteen years after the treaty. By the Treaty of Tordesillas of 1494f, after Columbus' discoveries, Spain and Portugal divided their spheres of influence so that all territories were divide by a line drawn north and south from the Canary Islands.
The King of Portugal had originally suggested drawing the line from east to west. France and Britain settled their differences over the American Continent by article 7 of the Treaty of Paris in which their spheres of influence were divided by the middle line of the River Mississippi. The French King ceded to His Britannic Majesty (with an exception) 'tout ce qu'il possede, ou a dU posséder, du Coté gauche du Fleuve'. 'Great Britain on her part', to use the words of Chief .Justice Marshall, 'surrendered to France all her pretensions to the country west of the Mississippi. It has never been supposed that she surrendered nothing, although she was not in actual possession of a foot of land. She surrendered all right to acquire the country; and any after attempt to purchase it from the Indians would have been considered and treated as an invasion of the territories of Frarlce'.
The same type of treaties were established for some parts of Asia and Africa in the 19th century. Britain and the Netherlands made Et Treaty in 1824. Article 10 states "His Netherlands Majesty engages, for Himself and His Subjects, never to f o r m any Establishment o f any part of the
Peninsula of Malacca, or to conclude any Treaty with any Native Prince, Chief or State therein." Articles Q and 1 2 state on the other hand that "His Britannick lvlajesty however, engages that no British Establishment
shall be made on (the Island of Sumatra), the Carirnen Isles, or on the Islands of Bottom, Bintang, Lingin, or o n any of the other Islands South of the Straights of Singapore, nor any Treaty concluded by British Authority with the Cheifs of these Islands". When the scramble for Africa began in the second half` of' the .l9th century, International Law reflected the ideological views of the ruling classes of the colonial powers. Oppenheim pays special tribute to Lindley's legal concept of the Modern process of territorial acquisition of the imperialist powers in
Africa. Both Oppenheim and Lindley include in their concept of spheres of influence the institution of hinterland. Lindley first recognized treaties of spheres of influence "set up over
an unorganised area by the agreement between the colonizing powers themselves". He described this category of areas "as a comparatively large one, and embraces the territories of a number of Chiefs, which it is open to the influencing Power to acquire by treaty, and perhaps also areas which are properly territorffum nullius and susceptible to Occupation. The agreement between the Colonial Powers merely amounts to a promise on the part of each of the parties to it to abstain from doing anything that might lead to the acquisition of sovereign rights within the sphere alloted to the other"8 . The United States, from its beginning, joined other colonial powers in expansion outside their borders. One of their leading jurists, Charles Cheney Hyde, in his International Law chiefly as interpreted and applied bY the United States supports the theory and practice of spheres of
fluence over ternltonlum nullius. He says that if the inhabitants of any territory belong to uncivilized, very backward peoples who are unable to enjoy the right of sovereignty, the conquerors can in fact ignore their claims and realise the conquest of that territory, as if it did not belong to any one.9 It is significant that this justification of aggression from the 18th and the 19th centuries against the Indians by the Americans has been kept in the second edition of Hyde's Manual, which still serves as one of the main text~books for training American students of law and young lawyers. The modern era of conventional spheres of influence properly began, according to Lindley, only after the Berlin Conference of 1884. In the Final Act of that Conference, the fact that territory might be under the influence, as distinct from the protection, or sovereignty, of a power,
was formally recognised for the first time; although the term 'sphere of influence' had been used ten years earlier in the Anglo-Russian negotiations with regard to Central Asia." Britain and Germany, in May 1885, concluded the first explicit treaty delimiting spheres of influence very precisely. Great Britain engaged "not to make acquisitions of territory, accept Protectorates, or interfere with the extension of German influence in that part of the coast of the Gulf of Guinea, or in the interior districts of the cast of" a defined line. Germany entered into a similar engagement in regard to the districts to the west of the line extending to the British colony of Lagos; and also undertook to refrain from making acquisitions of territory or establishing Protectorates o n the coast between the Colony of Natal and Delagoa
Bay. Each Power also agreed "to withdraw any Protectorates already established within the limits thus assigned to the other".
This arrangement was soon followed by others of a similar nature. On
THE CONCEPT OF SPHERES OF I N F L UENCE
the 24th December of the same year, France and Germany agreed upon the lines that were to divide the German Cameroons from the French
Gabon, and Togo from Dahomey. The following year (1886) saw agreements between Great Britain and Germany with reference to the Western Pacific (April), the Gulf of Guinea (August), and East Africa (November); while France and Portugal delimited their respective spheres in West Africa (May), and Germany and Portugal in South-west and South-east Africa (December). The ideological element of justification of spheres of influence has always been present from the conquest by the Spanish Crown of Mexico and Peru during the 16th century, to the present day, although the content of this justification is changing. Instead of religious factors, in the 19th century the colonial powers started to speak of their "civilised mission" or of "the spreading of culture" among "backward people". Although social conditions in subjugated colonies offered abundant proof for contrary conclusions, the colonizers always chose those elements which justified their acts in their own eyes. The reasons for the establishment of spheres of influence were also described as necessary for "natural frontiers", "strategic barriers" or
"vital or core interests". The necessity of providing guarantees against attack was often advanced as a pretext for creating buffer-states on the borders of a great power.
The jurists as well have advanced their own justification of spheres of influence. Hyde, in describing the institution of the protectorate (which differs from the institution of spheres of influence, although both have many common features) defends them in The Protection of Backward Com munzries or o f Countries o f Unique Civzllz°satzlon in the following
way : "Not infrequently a so-called protectorate has been established by a State over a community or entity unfamiliar with the full requirements of civilisation as tested by the standards prevailing in the international sod cry. In some cases the community has at the time appeared to be remote from the stage where it might be deemed to be capable of responding to them. In others it has
revealed the development of standards of its own and a faithfulness in observing them that have given promise of early capacity to respect those prescribed by the family of nations. An uncivilised community, so long as it remains such, is obviously ineligible for statehood. The outside world regards it as subject to the control of the State which in fact endeavours to protect it. Thus, for many purposes the relationship between the protector and the protected community may not be a. matter of
V L A DIMIR DEDIJER
3. Spheres world.
of influence concluded
in the period
of a new
dzlvz°szlon of the
We have seen that during the period of colonial expansion the great powers had to accept certain legal rules about their spheres of 'influence - the peoples and the lands which they described as backward territories or territorium nullius. A new stage of world division began once the world was already fully divided by the imperialist powers. The subjects who concluded treaties of spheres of influence were still great powers, although no longer the great powers of the European concert which had held the balance of world power in its hands almost up to the outbreak of the First World War. New imperialist forces appeared at the end of the 19th century.Japan, the United States, and a strong, unified Germany. The force of the notion of equality of men and nations also gained new strength throughout the world during the same period.
The subjects of these treaties were, l`irst, "dying nations, Turkey and China, the once great empires" as they were described by the Marquess of Salisbury (alias Robert Gascoyne-Cecil), the grand old man of British imperialism and its conquests in Africa and Asia, the British Foreign Secretary for decades who negotiated at the Mediterranean Agreements of 1887, about which we shall speak later, and who achieved the capitulation of the French at Fashoda and their renunciation of all claims to the Nile Valley. Besides "dying nations" many of the small European nations also became the objects of spheres of influence accords among the great powers, along with many liberation movements in parts of the world
which had not yet achieved the right of self-determination (about this category of spheres of influence, we shall speak under a separate heading). It is true that the problem of the division of the Ottoman Empire had already arisen in the l 8th century, particularly when the Habsburg Emperor .Joseph II and Catherine the Great, Empress of Russia, made a secret deal determining their spheres of influence in the Balkans. Called The Greek project, it established a demarcation line between the two empires. The Greek project was to be the basis of similar treaties agreeing spheres of influence between the two empires up to 1908, when the leading diplomats of the two feudal states tried to reach the agreement that Russia would recognise Vienna's right to the annexation of Bosnia and Herzegovina, while Vienna. would help in the realisation of the old
Russian dream of free passage through the Dardanelles. The division of the Ottoman Empire was named 'the Eastern question' in the European chaneellries: and it occupied the great powers for more
THE CONCEPT OF SPHERES OF fNFL UENCE
than a century. It was finally shelved at the end of the First World War. Yet, a bitter struggle was going on not only between supra-national empires, like Austria-Hungary and Russia, but also between Britain, France, Germany and Italy as well. Until the end of the . 9 t h century, Britain always claimed that her policy was designed to prevent the disintegration of the Ottoman Empire, although at times Britain grabbed some strategically important parts of the Ottoman territories. When Russian troops, after 1877, arrived at the outskirts of Istanbul, Russia dictated her conditions of peace at San Stefano, annexing either directly, or indirectly through her satellites in the Balkans, the greater part of the Ottoman Empire. Britain intervened under the pretext that the European balance of power was seriously threatened by this unilateral Russian action. Disraeli made a deal with Bismarck in Berlin in 1878, and Russia had to back down. Disraeli arranged with Vienna the acceptance of Vienna's occupation of Bosnia and Herzegovina, while the Ottoman Empire had to give its protector the island of Cyprus as a sphere of influence. As always in imperialist deals of this kind, there was an ideological explanation: Disraeli claimed that he needed the British garrison in Cyprus in order to protect the Ottoman Empire against Russian attack. On the other hand, the Cyprus base protected the British route to India, and facilitated her infiltration of Egypt and of the entire Middle East. The Ottoman Empire, which at one time stretched from the Persian Gulf in the East to Morocco in the West, had frontiers in the north which encompassed Budapest and the Crimea for more than 150 years. It thus controlled many different nationalities which mutinied against foreign rule. The Greeks, the Serbs, the Rumanians and the Bulgarians as well as the Albanians realized their nominal independence at different times
during the 19th century or at the beginning of the 20th century, but at the cost that some of them had to enter spheres of influence of this or that great power. Under pressure from Vienna, King Milan of Serbia virtually made his own country an Austrian sphere of influence in a secret convention in 1881 without even informing all the members of his government. Increased competition between British and German imperialism raised the Eastern question to new dimensions. After Kaiser Wilhelm It visited Istanbul in 1898, Germany obtained important economic and military concessions in the Ottoman territory, and Britain realized the necessity of solving her continuing problems with France and Russia in order t o form an alliance with them against her main enemy, the emerging German
imperial state. Although in 1887, Britain made agreements, first with Italy for the exclusion of Russia in the eastern Mediterranean area, and later, in the same year, with Austria-Hungary and Italy (with the tacit
approval of Germany) to prevent any new French concessions in other areas of the Mediterranean, these secret treaties on spheres of influence ceased functioning, due t o German imperialism's threat to redivide the world. The Fashoda victory over France was put aside, and in 1904 Lord Cromer ordered Fashoda to be renamed Kodok in order to remove a word which symbolised the national humiliation of the French. The Anglo-French Entente became a reality particularly after the First Moroccan Crisis iii 1906, when the Germans tried to destroy the AngloFrench rapprochement. The Germans almost succeeded in breaking the Entente again in 1911, when Kaiser Wilhelm II sent his gunboat Panther to the Moroccan port of Algeciras. France felt too weak at that time t o retaliate, but London issued a stern protest to Berlin. The he-line of the Empire was threatened by the German Navy. However, France continued to negotiate secretly with Germany and in November of 1911 the two agreed on a division of spheres of influence in Africa. Germany rccognised French rights in Morocco in return for the cession of two terri-
tories in the French Congo. London diplomacy worked feverishly to mend its relations with Run sia, and a secret agreement was signed on August 31, 1907, which defined the British and the Russian spheres of influence in Persia and their attitudes towards Afghanistan and Tibet. Although the Dardanelles were not mentioned explicitly, it was assumed that Britain gave consent to Russian control over them. The secret agreement of' 1907 was primarily aimed at German penetration towards Baghdad and other territories in that area still under the sovereignty of the Ottoman Empire. Special kinds of treaties on spheres of influence were concluded be~
tween the great powers in Asia, not only concerning Persia, but also involving Indochina, Korea and China herself. Lindley defines this kind of spheres of influence accord as a suz'generzls phenomenon: "An interest in a part of the territory of a somewhat advanced State may be based upon the arrangement made with that State itself - for instance, in the form of an undertaking on the part of the State not to dispose of the territory, or not to dispose of it to any State except the interested Power. Such an arrangement is sometimes said to create a 'sphere of influence' or 'sphere of interest'." Lindley's legal views reflect the ideology of the imperialist states of his era. They tried t o justify their penetration of China and other states in Asia by arguing that treaties had been made with the Governments of
these states. There were strong, popular movements against imperialist penetration in most parts of Asia, and particularly in China, at that time. The legal Governments of some of these states often collaborated with
T H E CONCEPT OF SPHERES OF [ N F L UENCE
the imperialist states in order to preserve their own capacity t o rule. This pattern of reliance upon the support of imperial partners, by the possessing classes in underdeveloped countries with feudal social systems, became well established. It is significant that some of the great powers practised the same methods in the Balkans at the end of the 19th century. When King Milan Obrenovic of Serbia concluded the secret convention with Vienna in 1881, he promised that he would not tolerate any action on Serbian territory against Austro-Hungarian rule in Bosnia. On the other hand Austria-Hungary gave assurances that it would do its best to keep the Obrenovic dynasty on the Serbian throne. At that time the Serbian peasantry, headed by the followers of Svetozar Markovic, the first Socialist in Serbia, were on the eve of an open rebellion against the sys» Lem of King Milan's government. In the l88lsecret convention, Vienna promised King Milan to promote the expansion of the Serbian bourgeoisie towards Macedonia and Albania, guaranteeing its sphere of influence in that area of the Balkans. just a few years before, at San Stefano, the Russian Government promoted the aspirations of the Bulgarian bourgeoisie towards some regions of Serbia (Nis, Vranje), Macedonia and even a part of Central Albania. This was a typical policy of divide et imper, under which the Serbian and Bulgarian ruling classes were basically fighting for the interests of their own great power-protectors. When the situation changed, at the beginning of the 20th century, under Russian influence Serbia and Bulgaria made a deal against the Ottoman Empire on the eve of the war. Bulgaria accepted as the Serbian sphere of' influence Northern Albania and Kosovo, while Serbia conceded most of Macedonia to Bulgaria, but they could not agree who would take the central part of Macedonia in~ eluding Skopje. Greece adhered to this secret agreement, asking for it~ self a part of Southern Albania and the southern areas of Macedonia.
4. The Spheres of zitfluence of the First World War The outbreak of the First World War in 1914 opened up a new period in the history of imperialism. I will deal here with the issue from its historical and legal aspects. As we have seen, treaties on spheres of influence have as a rule, a temporary character. First, powers conclude them when the balance of power changes. In this sense treaties on spheres of influence express the existing equilibrium between states. Due to the uneven development of states, when a new balance of power is established, spheres of influence become one means of identifying changes in that
balance. \,Ve have seen that spheres of influence have only been one form of ae-
quisition of territory by the powers, or, more precisely, a transitional step towards the complete and legal annexation of such territory. As public opinion against secret diplomacy increased, and as the
struggle of' former dependent territories and colonies became stronger, great powers were obliged to apply new methods in the establishment of spheres of influence. As we see in the contemporary era, they pay lip service to the formal independence of states, but through economic and other means they seek to achieve the same goals as held in the hey-day of colonialism. Tracing the evolution of spheres of influence from the beginning of the First World War up to the present, we have to summarize the war aims of the belligerent powers of the 1914-1918 war and the post-war period. The German ruling class had in 1914 already made its plan for spheres of influence encompassing most of Europe under German rule, including plans for Austria-Hungary and the whole Danube Basin, and the Balkans. My opinion is that German imperialism already regarded AustriaHungary as its own sphere of influence even prior to the outbreak of the First World War, despite the fact that Habsburgs and Hohenzollern had fought so long for leadership over all German states. Even though AustriaHungary and Germany did not have identical attitudes in foreign affairs in the period between 1900 and 1914, the reliance of Vienna's economy on German capital was markedly increasing as the 1914; war was approaching. Despite some opposition from a part of the Austrian ruling class, Austrian diplomacy accepted Berlin's overall leadership from 1913 on. So Austria-Hungary became a kind of German sphere of influence, and it was only a question of time before it would evolve further into domination with a formal annexation of Austrian territory. German imperialism realized this goal under Hitler in 1938 by proclaiming the Anschluss of Austria to the Third Reich. Because some of the key state documents are missing, it is impossible to define the aims of the victorious powers of the 1914-18 war with historical precision. France, Italy and particularly Britain were reluctant to publish their secret documents from the First World War for many decades. Bernadotte Schmitt, one of the greatest American historians of the period from 1908 to 1918, publicly expressed the view that Britain was unwilling to publish its 1914-1918 documents because she had promised the same territory to two and even three contenders
in the course of her secret dealings during the war, redrawing the lines of a new division of spheres of influence, especially concerning the Ottoman Empire and its territories in the Middle East.
THE CONCEPT OF SPHERES OF INFL UENCE
The objective historical truth is that all the great powers in the First
World War employed similar tactics. The decision of the new Revolutionary Russian Government in 1917, to publish all the secret agreements of tsarist Russia with her allies in the First World War helped historians to form a more precise view of the war aims of each belligerent and of the various concepts of spheres oliniluence held by them. The classic case was that of the secret Pact of London, signed on April 26, 1915. Although Italy had been an ally of Germany and AustriaHungary since 1882 as a member of the Triple Alliance, it declared its neutrality at the outbreak of the First World War, while simultaneously bargaining hard with both groups of belligerents. Germany put pressure on Vienna to cede to Italy a part of the Habsburg territories inhabited by Italians, but the Italian Government, especially its military and naval circles, sought a much bigger piece of Austria-Hungary, including the Adriatic islands and a part of Dalmatia. The Italian Prime Minister, Salandra, talked about "unlimited love towards the fatherland Italy and the n sacred egotism", but at the same time he . Allied side. It is still one of the finest exam_pies of horse~tradin_g_in the history of modern diplomacy. By the London Pact of 1915 Britain, France and Russia promised Italy that it could annex the district of Trevino, the entire Southern Tyrol up to the Brenner Pass, the city and district of Trieste, Gorizia and Gradisca, all stria, all Dalmatia, some Dalmatian islands, the Albanian port of Valona, the island of Sasscno, a part of Southern Albania, the Dodecanese islands and also some territories in Turkey proper. In article 9 it was said
"France, Great Britain, and Russia admit in principle the fact of Italy's interest in the maintenance of the political balance of power in the Mediterranean, and
her rights, in case of a partition of Turkey, to a share, equal to theirs, in the
basin of the Mediterranean viz., in that part of it which adjoins the Province of Adalia, in which Italy has already acquired special rights and interests defined in the italo-British Convention. The zone which is to be made Italy's property is to be more precisely defined in due course in conformity with the vital interests of France and Great Britain. Italy's interest will likewise to taken into consideration in case the powers should also maintain the territorial integrity of Asiatic Turkey for some future period of time, and if they should only proceed to establish among themselves spheres of influence. In case France, Great Britain, and Russia should, in' the course of the present war, occupy any districts of Asiatic Turkey, the entire territory adjacent to Adalia and herewith more specifically defined is to be left to Italy, who reserves her right to occupy it,"
Russia adhered to the London Pact, which ceded many territories in-
habited by Slavs (Slovenes and Croats) to Italy, but only after her pretensions towards Istanbul and the Straits were satisfied. On March 12, 1915, Britain officially recognized Russia's rights to occupy Istanbul and
V L A DIMIR DEDIJER
territory on both sides of the Straits. Immediately after the London Pact, Britain and France began to establish their spheres of influence in the Middle East, providing for partition of the Ottoman Empire after the war. They made an agreement know in diplomatic history as the Sykes-Picot Pact, on May 16, 1916. The Russian Government was informed of the contents of this treaty and adhered to it.
On the basis of this secret treaty Britain had its spheres of influence in Mesopotamia, without Mosul, a greater part of Arabia, Transjordan and northern Palestine with the port of Haifa. The rest of Palestine was to be under an international regime. (At the same time T.E. Lawrence, representing the British Government, promised the Arabs the right to establish their own independent state, and in consequence they rose against Ottoman rule)- France was to acquire the whole of Syria, Lebanon, Cilicia, and even a part of Turkey proper, an area of Eastern Ana~ folia. As its spheres of influence France obtained a part of Arabia, and Mosul with its oil deposits. Russia was promised Trapezunt, Erzerum, Bayazit, Van, a part of Kurdistan and the adjoining coast of the Black Sea. Italy obtained a big slice of southern and southwest Anatolia with Adalia, Kenya, Ajdin and Srnirna. When the revolution broke out in Russia, at the end of 191 T, Britain and France, her former allies, together with the United States, concluded secret treaties dividing Russia itself into spheres of influence; hoping that the new revolutionary regime would collapse under the aggression, first of Germany, and, after the defeat of Germany, by the open intervention of the armies of a dozen capitalist states, headed by American, British, French, Czechoslovak and Japanese troops, both in European
parts of Russia and in the Vladivostok area and Siberia. The first of these secret treaties was already concluded in December, 1917, between Britain and France, with the approval of the United States government. France decided t o wage armed hostilities against the new Russian revolutionary government in the Ukraine, Crimea and Bessarabia. Britain chose the Don, Kuban and Caucasus areas." In the spring of 1918, after Russia signed a treaty of peace with Germany a t Brest-Litovsk, American, British and French troops landed in Murmansk , while British andjapanese troops took Vladivostok. Hyde tried t o justify the American intervention as follows : "In order to safeguard from German seizure large amounts of war material at Archangel, to salvage others which Russian Soviet authorities had previously
taken inland, and with a view also to forming a junction with a Czecho-Slovak force to the southward, an American armed force was landed at Archangel early in September 1918, and formed a part of a military expedition which under British command was sent inland. The expedition, simple enough in
THE CONCEPT OF SPHERES OF INFL UENCE
conception, encountered, however, constant Russian opposition of Bolshevik
origin, a circumstance that transformed its mission into one principally concerned with maintaining its own communications with Archangel, and with shielding that place itself from Bolshevik aggression. To that end the assumption of Allied control over a substantial area became necessary".13
But the troops of interventionist states remained there even after the capitulation of Germany on November 11, 1918. Hyde again justified this intervention: "After the signature of the Armistice with Germany of November I I , 1918, the work of the Allied expedition, until its final withdrawal in 1919, was confined to an effort to safeguard both itself and the anti-Bolshevik authority at Archangel from annihilation. Notwithstanding the sympathy of American authority for
any Russian Eovernmental power that gave promise of remaining steadfast in opposition to the Bolshevik regime, the presence of American troops near Archangel had been essentially a part of a belligerent movement against an enemy of the United States that was not Russia. After the Armistice, the character of the mission of those troops underwent no change, despite the opposition encountered from Russian soldiery. If, finally, they were to be a temporary buffer between the Bolshevik forces and anti-Bolshevik authority at Archangel, it was a mere response to a sense of a moral obligation to shield so long as possible from an increasing danger of destruction an entity which while in de facto control of a particular zone, had stood fairly faithful in the effort to oppose the extension of German belligerent power. 3
Soviet historians, on the other hand, point out that the State Department of the United States, injanuary, 1919, made definite proposals to other great powers for the division of spheres of influence in Russia, after the interventionist armies achieved victory. One member of the American delegation to the Peace conference in Paris, D. Miller, published his own diary in 1924, revealing the plans of the division of Russia: "The whole of Russia should be divided into large parts, which could economical-
ly represent entities for themselves. But each of these parts should not' be so large as to represent a powerful state."
Similar plans existed among French and British statesmen at that time. But t h e Russian revolutionary army succeeded in driving out of its territory all the troops of the interventionists together with the troops of the possessing classes of the old Russia, who were helping them. Thus
these plans for the division of Russia into spheres of influence were not realized, Yet, between 1918 and 1941 there were strong g r u b s among the ruling-classes of Britain, France, the United States, Japan, Italy and especially Germany who advocated policies of reconciliation among the capitalist powers for the creation of a common front against the Soviet Union, the first country to overthrow the old capitalist-feudal system.
Among historians there is a controversy on the question whether the Soviet~Gerinan Pact of August, 1939, was primarily motivated by the Soviet Union's fear that the Munich Agreement of 1938 represented a
new plot by the reactionary forces in Europe for a new intervention against the Soviet Union.
New elements in the concept of spheres of influence, with the emergence of states with socialist eonstzltutz'on5. As we have seen, Professor Bartos in his definition of spheres of in-
fluence mentions the historical fact that during the Second World War
"great Allied powers entered into agreements of spheres of influence of a distinctive imperialist character", and that "the Soviet Union took part in the conclusion of these treaties as an equal partner."
This represents obviously a new element in the evolution of the concept of spheres of influence, because its subject is a state with a socialist constitution. At the end of the Second World War, many other states (like China, North Korea, North Vietnam in Asia, Yugoslavia, Albania, Bulgaria, Czechoslovakia, Rumania, Hungary, Poland in Europe, Algeria and others in Africa, Cuba in Latin America) have also proclaimed as their aim the establishment of a Socialist society.
As the history of the last 25 years has shown, there have arisen among these states contradictions of an economic and political character. In some cases the conflicts reached a point short of war: the Soviet Union and Yugoslavia in the period of 1948 to 1953, or the Soviet Union and China at the present Lime. In the case of Hungary in 1956 and Czechoslovakia in 1968, the Soviet Union marched her troops into the territory of these nominally independent countries. This state of affairs, as well as the marked increase in secret diplomacy, has opened the possibility that these states could be the objects as well as the subjects of spheres of influence.
Scientific analysis and interpretation of the driving forces of these social phenomena has scarcely begun. FOOTNOTES 1.
2. 3. 4, 5,
7. 89. 10-
Oppenheim, International Law, vol. I, p. 455. The Great Soviet Encyclopaedia, vol. 41, p. 357. Dr. Milan Bartos, Medjunarodno java bravo, vol. II, p. 14. Ibid. p. 14-15. Ibid. p. 15. Oppenheim, op. cit,, I, p. 48. Lindley, Acquisition of Territories, p. 208. Lindley, p. 21 I -
C.C. Hyde, International Law, vol. II, p. 68. Lindley, op. cit.. p. 212.
Hyde, op. cit., vol. H, pp. 84-85. Is tozrija komunisticeskoj partial Sovje tskovo Sojuza, p. 275. Istorija zmesnei Pol£ts'k£ SSSRQ, 1917-1945, P- 98. Hyde, op. c:lt., vol
pp. 2 6 2 7 0 -
Modern India, Imperialism and the Great Powers
The Hzl5to¢'ica! Background India was fully integrated into the
world capitalist economy in a subordinate colonial position during the 19th century. It emerged as a classic colony playing a crucial role in the development of British capitalism. It was not accidental that the British plunder of India began in the l750's simultaneously with the initiation of the Industrial Revolution in Britain. For example,
Bipan Chandra I
bf wealth or the unilateral transfer of capital from India after 1765 amounted to nearly 3 per cent of the British national income at a time when only about 5 per cent of the British national income was being invested. During the years alter 1760 when Britain was developing into the leading developed capitalist country of the world, India was being under-developed into becoming the 'leadin backward, colonial country of the world. During the 19th century, India served as a major market for British manufactures, especially cotton textiles and later
iron and steel products and
mr I". way stores. India was also an important supplier of food stuffs and raw materials to Britain. Indian opium played a crucial role in developing the triangular trade which enabled the full economic exploitation of the Chinese people. In the second half of the 19th century, Indian railways constructed at the cost of 3,500 million Rupees (nearly 350 million Pound O
Sterling) provided the largest outlet for the export of British capital. The bulk of Bifban Chandra teaches a t the jawarhal Nehru University in Defly.
India's transport system, rnodcrn mines and industries, foreign trade, coastal and international shipping, and banks
and insurance companies were under British control. For nearly a hundred years after 1858, Indian exports enabled Britain to acquire the foreign exchange needed to meet its own international balance of payments deficit. Control over India's coastal and international carrying trade was a major factor in the growth of British shipping. India absorbed a large section of the unemployed youth of the British
middle and upper classes (one third of the india budget in l. 892 was spent on Englishmen in India). This not only provided a basic cushion to these classes but also thereby enabled the British political process to flow smoothly without the tensions and disturbances, both from the right and the left, that the unemployed educated youth of these classes have a tendency to promote in conjunction with their idealism and intellectual discontent. Instead, their humanitarian proclivities could now
find expression in missionary activity on the right and Fabianism on the
left. India as 'the brightest jewel in the British Empire' also played an important role in the ideology of imperialism which enabled the British ruling classes to keep their political power intact even after adult franchise was introduced and also to cement their society around capitalism when it was being riven with class conflict. Thus the pride and glory underlying the slogan of 'the sun never sets on the British Empire' were used to keep workers contented on whose slum dwellings the sun seldom shone in real life.
India also played a crucial role in one other, often ignored, aspect. All this did not cost Britain a penny. This explains the virtual absence of any popular protest in Britain against the British conquest of India as well as the brutal suppression of all anti-British protest. For example, many
thousands of tribal people fighting with swords, bows and arrows were cut down by the well-armed, disciplined British army in India. Or, to give another instance, the massacre of 25,000 people by the British army was regarded as an appropriate reprisal for the 'ruling' (Delhi, 1857). Similarly, the manpower used for conquest and suppression was either Indian or European 'volunteers' recruited from the lower depths of British, Irish, and European societies. Once again the respectable British citizens did not have to lose their sons. The Indian Empire had therefore hardly any 'sordid' or painful aspects. One could start off the day well by reading about the power and glory and the humanitarian deeds in the morning paper along with one's tea. India bore the entire cost of its own conquest, including the recon-
quest after the Revolt of 1857. Secondly, when it became necessary to partially modernise India through railways, education, a modern legal system, development of irrigation, and detailed penetration of adminis-
MODERN I N D I A AND IMPERIALISM
tration into the countryside, India paid the entire cost.
Lastly, once the struggle for the division and then the redivision of the world became intense after 1870, India acted as the chief gendarme
of British imperialism and furnished both the material and the human resources for its expansion and maintenance. Afghanistan, Central Asia, Tibet, the Persian gulf area, Eastern Africa, Egypt, Sudan, Burma, China, and to some extent even South Africa were brought or kept within the British sphere of' influence through the instrumentality of the Indian army and the Indian finances. The same was true of West Asia during the First World War. In fact, the Indian army could not be used in Latin America, and that might to some extent explain the gradual loss of the informal empire there t o the USA I Throughout this period the British Indian army was the only largescale army contingent available to Britain. This is one of the major reasons why the British Empire in Asia and Africa collapsed like a house of cards once Britain lost control over the Indian army and finances. It may also be noted that it was precisely in the period after 1870 when British economic supremacy was challenged by rival capitalist powers, when the hunt for markets, raw materials, and fields for investment was intensified, and when adult franchise made it necessary to find new ideological appeals to the working class that British rule in
India was more stringently and consciously clamped down and the earlier talk of training Indians for Free Trade and self-government was abandoned in favour of the doctrine of 'benevolent despotism'. Furthermore, through administrative and other measures, India was kept a close preserve of British capitalism. The result was that American capitalism had to begin its penetration of the Indian economy after 1947
virtually from scratch and had to spend many valuable years in building contacts and creating a base for itself in the economic, political, scientific, cultural and intellectual life of the country.
Sometimes it is said that British imperialism, especially in the 20th century, did not derive as great an economic advantage from its domination of India as was claimed by the vigorous imperialists or by the anti-imperialists. And this is then supposed to prove that modern imperialisrn did not have an economic motivation or at least not the Leninist one of the investment of capital. It is true that, in the 20th century, India was no longer as big a market for British goods as had been hoped, nor as big an absorber of British capital as desired. Between the hope and fulfillment there was a big gap. But this does not disprove anything.
It is only a manifestation of the internal contradictions in which British imperialism had become involved as a result of its prolonged exploitation of India. It was necessary that India and its people developed
economically if imperialism was to exploit them fully, but this very exploitation made it impossible for India to develop. Thus, once the internal market of India had been captured, the impoverished Indian peasant could neither develop further as a buyer of British manufactures nor provide the consumer base for foreign-owned industries in India. Similarly, once the peasant had been taxed to the point of endurance, the In» dion state revenues could not be further plundered by British finance capital. And in the limited Indian market, Indian capital was venturesome enough to outcompete British capital in many fields. Faced with a burgeoning anti-imperialist movement, imperialist authorities could neither antagonise the Indian bourgeoisie beyond a point nor tax the peasant beyond endurance. Imperialist exploitation could not there fore fulfil the dreams that had so long inspired imperialist policies in India. In time, a powerful anti-imperialist movement developed in India. Some of its facets resulted in a forceful impact on the development of India's relations with the Great Powers.
A. The Indian nationalist movement was based on an analytical and all~sided investigation of the economic tooLs and motive forces of colonialism. Before the end of the 9th century, the founding fathers of the anti-imperialist movement had worked out a clear understanding not
only of the role of colonialism as an extractor of Indian economic surplus directly via taxation and indirectly by making India its agrarian hinterland for the sale of its manufactures and purchase of India's raw
materials, but also of its new phase of the exploitation of Indian l a b o r and the suppression of Indian capital through export and investment of its capital in India. They also saw clearly that the essence o f British
imperialism lay in the subordination of the Indian economy as a whole to that of Britain. Moreover, they had come to see and propagate that colonialism was not a fortuitous phenomenon or a matter of the political policy of the ruling parties in Britain but sprang from the very nature and character of British society and economy, the needs of its ruling classes and its economic relationship with India. This understanding of the complex economic mechanism of modern imperialism was further
strengthened and advanced after 1918 under the impact of the mass struggle against imperialism, the Soviet Revolution, and the spread of Marxist ideas. The result has been a heightened awareness of the dangers of foreign economic penetration even after 1947. This has been particularly so in the field of private foreign capital investment. The Indian
national leadership started attacking foreign capital from the l870's, clearly bringing out both its economic and political consequences.
Foreign capital was seen not as developing India but as 'despoiling'
MODERN I N D I A A N D IMPBRIA LISM
India and exploiting its resources and impoverishing it. For example, the Bengali of 1 _June 1901 wrote that the expansion of foreign investmerits would hasten the country 7s ruin and "surely reduce our nation to a state of eternal economic dependence upon British capital". This
nationalist attitude towards foreign capital was summed u p by Bipin Chandra Pal in his weekly, the New India, of 1 2 August 1901, in the following manner ' "The introduction of foreign, and mostly British, capital for working out the
natural resources of the country, instead of being a help, is, in fact, the greatest of hindrances to all real improvements in the economic condition of the people. This exploitation of the land by foreign capitalists threatens to involve both Government and people in a common ruin . . It is as much a political, as it is an
economic danger. And the future of New India absolutely depends upon an early and radical remedy of this two-edged evil,"
The political danger was also clearly recognized. G.V. _]shi wrote in 1885: "Politically speaking, if we do not misread history, power must gravitate towards property and wealth, and a strong foreign mercantile interest in the country
would not fail to be a very troublesome active factor in the State; it would always be disposed to use the power and influence it could command for its own selfish aims, and dominate the action of Govenirnent in its own favour."
The Hindu of 23 September 1889 remarked: "Where foreign capital has been sunk in a country, the administration of that
country becomes at once the concern of the bondholders."
The nationalists had very early projected the notion of using foreign funds without letting the foreign entrepreneur enter. This was to be
done by building up a powerful state (public sector) which would keep out the foreign capitalists in two ways. Firstly, the public sector would build industries which were too large for private Indian capital to build
and which would otherwise have to be built by foreign capitalists. Secondly, the state sector would act as an intermediary and a protective wall between foreign capital and Indian enterprise. It would borrow foreign capital and either use it on its own account o r lend it t o the In-
dian capitalists through its own financial institutions. The nationalist movement built up a powerful commitment to rapid industrialization on the basis of its own heavy capital goods sector. This was also true at t h e level of popular consciousness. Imperialist pressure to bend Indian econornie planning to its interests after
this consciousness a powerful barrier. The nationalist movement widely popularised the motive of ilnperial~ i t exploitation through the drain mechanism (export of profits by
BIPA N C H A NDRA
foreign enterprise, etc.) and unequal trade. This resulted in the people becoming very sensitive after 1947 both to large-scale investment of foreign capital and the pattern of trade between the developed capitalist countries and India. Since this consciousness and 'fear' of imperialist exploitation has played an important role in the struggle against fresh imperialist penetration, the social sciences, history, economics and sociology have been pressed into service in the imperialist countries to remove such fears by proving that the entire notion is misconceived or exaggerated as a result of 'nationalist phobia'. The legitimacy of nationalist movements is, for example, recognized on grounds of national psychology, and an abstract desire for freedom or as the expression of new 'elite' interests. But their character as a response to the imperialist exploitation of all classes and strata of the colonial societies is strenuously denied. B. The nationalist movement gradually involved a large-scale politicalisation of the people and their participation in the movement. Moreover, from the foundation of the Indian National Congress in 1885, most of the nationalist and other mass organizations were organized along democratic lines. This led to two results: on the one hand, parliamentary democracy along with civil liberties and adult franchise had to be promised as well as brought into being as the price of popular participation in the anti-imperialist struggle; on the other hand, the Government had to pay constant heed to popular opinion and t o carry it be~ hind its policies. Undoubtedly, the Government has had a great capacity to manipulate this opinion. But in conditions of comparatively open competition from the left-wing parties and the pressure of its own nationalist wing, this manipulation has occurred within certain limits.
lt has not been possible for the Government and the ruling classes to ignore the anti-imperialist consciousness, even if they had the desire to do so, as openly and completely as could the undemocratic regimes of Pakistan, China before 1949, South Korea, Philippines, Malaysia, Indonesia, West Asia, etc. C. An effective left-wing came into being in the 1930's and 19-40's. IL acquired a strong base among the intelligentsia, youth, working class, and in some parts of the country among the peasantry. Though organizationally too weak and politically confused to challenge the politically mature bourgeois leadership before or after independence, it has always had at every stage vast potentialities of growth. It has constantly
waited in the wings so to speak. Its potential appeal to the masses could not be ignored. The bourgeois leadership has in fact kept it confused, divided, and powerless by stealing its thunder at the programmatic
MODERN INDIA AND IMPERIALISM
plane precisely on two issues, one of anti-imperialism, and the other of social development o n the basis of social equality and social justice, as
signified by the vague goal of socialism. The fear of the left has been a powerful factor in keeping the Government from aligning too closely with imperialist powers or making basic concessions to imperialism. D.
in the course of their own struggle, the Indian nationalists evolved
a foreign policy of opposition to imperialism and solidarity with the anti-imperialist movements in other parts of the world. From the 18'/0's they opposed the use of the Indian army to extend British imperialism in Africa and Asia, Sentiments of solidarity with the Burmese patriots, the Afghans, the tribal people of the North-West Frontier, the Chinese people at the time of the I Ho-Tuan (Boxer) Uprising, the Tibetan people, the people o f Egypt and Sudan and other African people were vigorously expressed and popularised from 1878 to 1914. In the l920's this policy of anti-irnperialisrn was developed further. Expressing the solidarity of the Indian people with the colonial people and also the awareness of India's role as the gendarme of British imperialism the world over, Dr. M.A. Ansari said in his Presidential Address t o the National Congress Sesssion of 1927: "The history of the philanthropic burglary on the part of Europe is written in blood and suffering from Congo to Canton. Once India is free the whole edifice of imperialism will collapse as this is the keystone of the arch of
In the l 930's, the National Congress took a firm stand against imperialism in any part of the world and supported anti~imperialisL move-
ments in Asia and Africa. In spite otlJapan's Pan-Asian propaganda, the National Congress condemned the .Japanese attack o n China in 1937 and urged the Indian people to boycott "the use of japanese goods as a mark of their sympathy with the people of China"- The anti~imperialist consciousness of the Indian people and their increasing understanding of the character o f the world-wide struggle between imperialism on one side and the forces of socialism and national liberation on the other found clear-cut enunciation in Jawaharlal Nehru's Presidential Address to the Lucknow session of the National Congress in 1936: "Our struggle was but part of a far wider struggle for freedom, and the forces that moved us were moving :millions of people all over the world and driving them into action. Capitalism, in its difficulties, took to fascism . . . It became, even in some of its homelands, what its imperialist count erpart had long been in the subject colonial countries. Fascism and imperialism thus stood out as the
two faces of the now decaying capitalism . . . Socialism in the west and the raising nationalism in the Eastern and dependent countries opposed this combination
of fascism and imperialism."
Even though this understanding of imperialism as capitalism was rapidly abandoned by Jawaharlal Nehru and the dominant political
leadership during the 1940's and l950's, they have had to pay close attention t o this widespread consciousness in developing their relations with the Great Powers.
Even though India was economicaliv underdeveloped in 1947, it had developed quite a strong capitalist class. Indian capital was moreover highly concentrated. But, what is more important, this class developed as_.an independent class and not as a comprador class or as junior partners of foreign capital. Its dominant sections had no alliances or partnerships with international finance capital or the emerging giant corporations. its own monopoly structure developed on the basis of its own financial and industrial structure. Instead of allying with British capital in India or abroad through cartels and trusts, Indian monopoly capital developed on the basis of a multi-sided conglomerate character spread over vast regions and a variety of industrial, trading, and financial activities. Consequently, the Indian capitalist class was on the whole anti-imperialist and anti-foreign capital. While wanting to develop, this class was very chary of being dominated by the larger foreign capital. It was willing to let a powerful state sector develop as a protective wall rather than being gobbled up by international big capital. It was helped in the task by its monopoly and concentrated character because of which, and aided by powerful administrative measures, it could hope 4'
to stand up against the outside giants. It is interesting t o note that when
the era of collaboration agreements carne in the l950's, it was the small and medium capitalists who were found most willing to collaborate. Foreign capital also preferred t o deal with them rather than with the
giants since the former were easy to dilninate and control. 2.
Relationship with Imperialism and the Danger of Neo-Colonialism
India became politically independent on 15 August, 1947, and the Indian capitalist class acquired control over its social development. I n the colonial period, the Indian economy had been integrated with the world capitalist economy in a subordinate position and this constituted the essence of the colonialization of the Indian economy. The end of the political domination of colonialism did not, and could not, mean the automatic decolonialization of the Indian economy. In fact, the colonial economy could even absorb a degree of independent development of the
capitalist class and capitalist economy in the colony. It is the hypothesis of this paper that the air and thrust of the Government of India and the Indian capitalist class since 1947 has been towards
MODERN I N D I A AND IMPERIALISM
the development of an independent and balanced national capitalist economy and the avoidance of further imperialist economic control and domination. The Indian capitalist class neither before 1947 nor since 1947 has been either a basically comprador class or a junior partner of the imperialist monopolies. Its evolution under colonialism as an independcnt capitalist class and its opposition to and struggle against colonialism already indicated that it would not readily fall into the clutches of imperialism and welcome neo-colonialism. The big monopoly corporations and international conglomerates of the imperialist world in general and the USA in particular have not been permitted to acquire a major hold inside India. By and large, the import bans and restrictions and high tariff walls have been used to promote Indian capitalists owned and controlled industries and not to facilitate the setting up of subsidiaries of the international corporations. In spite of the increase in technical collaboration agreements and growth in foreign investment, it cannot be said that the national bourgeoisie of India, big or small, is entering into partnership with the giant foreign corporations. I n fact, investment of foreign capital in the Indian economy has been carefully controlled though given a great deal of encouragement within prescribed limits. The result is that foreign capital has hitherto remained quite 'shy' or hesitant in entering India. Moreover, there is not a single major or economically strategic sector of the Indian economy which is under the domination of foreign capital. Lastly, foreign finance capital hardly occupies today an important, not to speak of dominating, position in the Indian economy. Thus India has not been and is not likely in the immediate future to be absorbed economically by imperialism as a colony, semi-colony, or neo-colony. Rather underdeveloped Indian capitalism has been striving to follow, and will continue to strive to follow, the path of independent capitalist development. At the same time, it cannot be said that Indian capitalism is not dependent on imperialism or that its independent development is not seriously hampered by imperialism. While India's dependence on it perialism is not the result of the Indian capitalist class' domination by the imperialist capitalist class, it is still very much there because of the dependence of the Indian economy on imperialism which in turn is due to its being an integral part of the world capitalist economy. Thus the 'external' restrictions on the Indian economy and its development are 'structural', i.e. the products of it being a well-structured part of world capitalism which inevitably produces development in one of its parts while producing underdevelopment in the other. The underdeveloped
Indian capitalism has therefore found itself in a dilemma. It tries to
develop independently but does SO without breaking structural links with world capitalism, with the result that development is hampered and economic dependence on imperialist economic structure remains. On the other hand, in today's conditions, any effort, even within the bounds of capitalism, to break out of the world capitalist structure inv°ariably takes on revolutionary dimensions if it is to be successful, as the initial experience of Cuba after the revolution indicates. Indian capitalism has therefore not even been willing to make a radical effort in the direction. just as the Indian capitalist class and the Indian nationalist leadership developed a non-revolutionary or 'muddling through' strategy of mass mobilization and anti-imperialist struggle before 1947, they have since then followed a strategy of independent capitalist development, hoping that economic development within carefully controlled political limits and without revolutionising the internal social structure will gradually erode dependence on imperialism. In the bargain, India remains an independent country with a developing but still underdeveloped capitalist economy. What are the elements of this strategy which have enabled the system to exist successfully SO far, and what are the possible reasons which may lead to its failure? A. First, the state in India has been gradually trying, though in a nonrevolutionary way, to implement internally a bourgeois democratic programme of social and economic reforms of the sort that is usually associated with the completion of bourgeois democratic revolution. To put it negatively, although not radically restructuring the internal social, economic, and political order, India has not been following internally, a Za Chiang Kai-shek, a neo-colonial or semi-feudal programme either. Socially, education is spreading, women are educated o n a massive scale, op-
pression of women increasingly takes on a bourgeois coloring in place of a feudal coloring, especially in towns, the caste system is eroded at least to the extent that it does not remain an obstacle to the growth of capitalism (increasingly, oppression of the Harijans untouchables - in -.-
the countryside becomes an instrument for keeping agricultural wages down), family relations increasingly become bourgeois. The cultural and moral ethos is virtually dominated by cash. The structure of agrarian relations is gradually, stage by stage, transformed in the capitalist direction though, as in the case of Britain and Germany, at the cost of the cultivator and agricultural worker. Politically, parliamentary democracy and adult franchise prevail from village to national planes. Even the infringements of civil liberty and parliamentary democracy occur in a modern, capitalist way! Indian administration is modern by any standards, bent fully to the will of the small and big bourgeoisie.
MODERN INDIA AND IMPERIALISM
B. Secondly, state power has been used by an extremely mature and farsighted bourgeois political leadership to counter imperialist penetration through economic administrative measures and the assignment of a very active and large role to the public or state sector in modern industry. There has been a concentration of economic power in the bands of the state to face the giant imperialist monopoly corporations and finance on less unequal terms. The state sector has been used to build industries and elements of infrastructure which would not have been built by domestic capital and would have invariably necessitated the use of foreign capital. The state industrial and financial institutions have been used to absorb foreign capital into the economy without permitting the latter to acquire direct power. The giant foreign corporations' immense advantage of greater financial power, technological capacity, and monopoly have been largely neutralized by the use of state power to shut out their products through exchange controls, high tariffs, and absolute prohibitions, thus enabling the weaker domestic capital to burgeon forth under hothouse conditions. The resources of the state have been used to train a large army of engineers, scientists, and technical workers. Even the economic integration with world capitalism is sought to be loosened through administrative means. C. Thirdly, economic aid and technical assistance from the socialist. countries and the development of trade with them has played a crucial role in the non-revolutionary completion of bourgeois democratic tasks and the development and strengthening of independent capitalism. They have not only been used as bargaining counters to prevent the imperialist countries from presenting a monopolistic front towards India, but have also helped strengthen the public sector, t o lay the foundation of heavy
capital goods sector, and to break the stranglehold of foreign oil mono~ poles on India's industry, transport system and military structure. lt is of interest to note that the Indian capitalist class has both actively supported the development of economic relations with the socialist countries as well as utilised this link to the hilt and to a far greater extent than any other capitalist country. D. Fourthly, the Indian bourgeois order has been based from its inception in 1947 on the roost advanced system of political legitimization, i.e., bourgeois democracy. .Just as in the struggle against British imperialism, the Indian nationalist leadership evolved a style of mass mobilization and mass action which on the one hand 'involved' the people in politics and on the other hand left them without any political initiative or
autonomy, similarly Indian political leadership has used parliamentary democracy both to give people the satisfaction of participation in government and to deny them any effective voice in it. Yet, every succes-
sive election has politicalised or 'politcally socialised' an increasing larger number of people. Consequently, at no stage have any significant number of people questioned the legitimacy of the political system. Even the most radical critics of the system have had to function within its rules of the game. Politcal democracy has thus enabled the political leadership to throw the entire cost of capitalist development o n the shoulders of the common people. Even more, the failure to generate self-sustaining growth and the failure of living standards to rise have not generated the type of internal political crisis which would enable imperialist forces to intervene in internal politics on a decisive scale.
E. India's foreign policy has played a major role, particularly after political unrest began to develop, in cementing the diverse social forces around the dominant political leadership. Both the foreign policy and its cementing role have been consciously used to follow the path of independent capitalist development to counter overt imperialist blackmail as well as to weaken the clan of the left-wing opposition. F. A major factor that has enabled capitalism to develop in India has been the failure of the anti-capitalist left-wing to seriously challenge the existing social order even when the objective conditions f a v o r e d such a challenge. .Just as before 19457, the bourgeois nationalist leadership was at no stage faced with a serious left~wing challenge based on an indepen-
dent mobilization of the people against imperialism under left-wing leadership, so also after 194-7 there has been no such left-wing mass, nation-wide political mobilization either o n the agrarian question or against imperialistic economic penetration. A ready postulate of many has been that because of the fear of revolutionary forces and of 'expro-
priation', the bourgeoisie would rapidly become reactionary, abandon iriternal bourgeois reforms including economic development and political democracy, and join up with imperialism in an anti-Communist and antipeople crusade. The 'only' thing wrong with this postulate has been that it assumed the presence of such a threatening revolutionary force! It
hasn't happened that way. Thus the reformist bourgeoisie has succeeded in weakening semi-feudalism and imperialism and in building capitalism both in agriculture and industry precisely because the left was strong enough to keep it on its toes but not strong enough to endanger it to such an extent that it was compelled to take shelter in the lap of imperialism and feudalism. In other words, there has been a dialectical, mutually reinforcing development here. Bourgeois liberalism and reforms and
the policy of keeping out of imperialist alliances and the imperialist political system have enabled the bourgeois leadership to maintain its political influence over the people and to keep the left weak. At the same time,
MODERN I N D I A AND 1mpER1.4L1.s'm
the weakness of the left has enabled the bourgeoisie to remain liberal and outside the imperialistic camp. The strategy of independent capitalist development suffers, however, from two basic constraints. An underdeveloped capitalist country finds it impossible to develop today without basic internal social, economic, and political changes which would take the economy out of the capitalist path. Secondly, so long as it is a well-structured part of the world capitalist economy in a dependent position, it suffers from basic constraints on its development. Consequently, India has found it impossible to solve its national problems while following the capitalist path. But it should be carefully noted that both on the external and the internal planes the restrictions are structural or those of the system, being built or structured into it. The dependence o f lndia on irnperz'alzlsm is a system 's dependence arising out o f the very Position of Indian capitalism in the world capitalist economy. This dependence does not ariSe out o f the stranglehold o f foreign capital on the Indian economy, the compra-
dor character of Indian capitalist class or the latter being a junior partner of foreign capital or the Indian state being politically dominated by imperialism directly or through foreign aid or through finance capital in general. As pointed out earlier, neither foreign capital nor international corporations nor finance capital play a dominating or even an increasing role in the Indian economy. Nor is there one metropolitan centre vis a vis India. American private foreign capital in India plays second fiddle to British foreign capital, both in terms of finance and collaboration agreements. In trade, aid, foreign capital., and technological collaboration, India has been 'playing the field'. Here again India's relationship is a dependent one vis a vis not dominant American imperialism b u t vis a
vis the entire world capitalist system. Undoubtedly, India, as do other underdeveloped countries, suffers today from technological dependence which in specific industries leads to control. But it should be noted that this is once again a case of the system's dependence. All this does not, of course, mean that India, in following the strategy of independent capitalism, does not constantly face the danger of neo~ colonialism. But such a danger would arise primarily from the structural and social inability of its underdeveloped capitalism to develop itself and the country to the extent that social needs are met at a minimum desired plane. When the social failure becomes more and more glaring and also more and more unacceptable to the mass of people and a correct leadership begins to be provided to this discontent, the capitalist class and the dominant leadership would be compelled to seek economic and political support from imperialist powers. They would be compelled to strengthen their links with world capitalism to solve the very economic
problems which are in part created by these links. In case of a genuine threat of mass revolt, dependent political and military links would also be forged in order to defend the system. Hypothetically, this may also increase dependence on the socialist countries. A few years back, one might have rejected out of hand the possibility of socialist countries aiding a capitalist regime to suppress popular revolt. But today, such a possibility does not appear so preposterous. It could happen under the slogans of keeping neo-colonialism out and helping strengthen the independence of the developing capitalism. It may also be noted that this type of economic and political threat of neo-colonialism is not faced only by an ex-colony like India. As Lenin noted much earler, even other developing or developed capitalist countries could be subjected to it. The position of India today is similar t o that of Portugal, Spain, Italy, or even Russia during the 19th century and the first half of the 20th century. Moreover, in the highly integrated system of the international capitalist economy, this threat is constantly faced by countries like Canada, Spain, Greece and Yugoslavia or even .Japan and the Scandinavian countries. Only the degree of threat and its immediacy are greater in the case of India. The struggle against imperialism, semi-colonialism, or neo-colonialism in India has therefore to take the form of struggle against the development of capitalism. India is at present not a neo-colony or semi-colony dominated by foreign capital. imperialist penetration occurs and the danger of neo-colonialisni arises because India follows the path of independent capitalism. Similarly, imperialist pressure is also exercised primarily not through ambassadors, World Bank officials, foreign capital control, etc., but through economic realities. This is why the entire U.S. effort
and pressure in India have been exercised primarily to promote the development of the capitalist system or private enterprise and its enmeshing with international capitalism and only secondarily to promote American investments. This is also the reason why the U.S.A. stopped objecting to Soviet economic assistant to India once it was obvious that the object and consequence of this assistance was not to build soeialisrn but independent capitalism. Such assistance is now even praised as sharing the international burden for the development of India. It may be acknowledged at this stage that the integration of the Indian economy, as also of other similar underdeveloped capitalist economies, into the world capitalist-imperialist economy in a dependent position has yet t o be explored in a serious way_ What is obvious is that what is
involved here is not merely the use of these countries as markets for manufactures, or sources of raw materials, or fields of investment, but
their integration into a world-wide structure through aid, trade, finance,
MODERN INDIA AND IMPERIALISM
investment, technology, science, the brain-drain, military deface against internal revolt and external enemies, and culture and ideology (for example, integrated development of economics, political science, and sociology all over the capitalist world including its underdeveloped part).
Maritime South-East Asia
(Note: Maritime South East
Asia conventionally consists territories now known as Malaysia, Singapore, Indonesia, Portuguese Tim or, and
Adam Srnith - who, along with his Scottish contemporaries, has so much to answer for in formulating the insidious theory and practice of industrial revolution - noted at the end of the 18th century the significance of Anglo-Dutch economic and commercial rivalry.1 It was a rivalry which extended all the way to South East Asia. The Netherlands, although at this time " . . in proportion to the extent of the land and the number of its inhabitants by far the richest coun-
. . ", and
the Philippines, but in what
try in Europe.
follows I restrict myself to the
endowed with the "greatest share of the carrying trade", were significantly weak in home industry. Smith correctly per-
Malayan peninsula and the In-
ceived that Britain could overhaul Holland
by Malcolm Caldwell
given policies appropriate to encouraging industrialisation, regardless of the Dutch initial lead in capital accumulation and command of t h e carrying trade. The respective positions and trends of the two economies were to have an important bearing upon their colonial economic
policies in South East Asia. Britain and the Netherlands had pressed hard upon the heels of Portugal and
Spain in pursuit of the coveted wealth of
Malcolm Caldwell is lecturer in South East Asian Economic History, School of Oriental and African Studies, Univer-
He is an
of The .Journal of
Contemporary Asia, author
South East Asia, and both the northern powers had been active in the region by the end of the 16th century. The Dutch at this time succeeded in wrestling and securing a clearly predominant position in the maritime region south of the Philippines. Their capture of Djakarta in 1619 marked an important step i n the conquest of the Indonesian archipelago (a process which, however, took three centuries thereafter and was never actually com-
Hendersqnj The Chainless
pletedz 1. Britain abandoned for the time being the seemingly unequal and futile
struggle and retired t o digest the Indian
of Indonesia and (with j. D.
MARITIME SO UTH-EAST ASIA
sub-continent (though after final expulsion from Bantam in north-west Java in 1684 the British kept toe-holds at Benkulen and other points on the west coast of Sumatra). Between the close of the 17th century and the opening of the 19th major shifts affected the relative positions of the Netherlands, Great Britain, and the principalities of the Malay maritime crescent. It is impossible to do more than summarise these here.3 In the first place, the major indigenous economic and political powers were progressively undermined and fragmented. Whereas at the outset the European powers had had, by and large, to fit into a pre-existing network and system of trade, by the beginning of the 19th century it was impossible to overlook the emergence - and gradual reinforcement to the Western advantage - of overall unequal economic relations.4 Whole regions, once flourishing, were ruined; local merchants once prominent in international trade were reduced to petty trading and piracy; and the assiduous farmers ofjava became, in effect, rack-rented tenants of the Dutch while their local handicrafts and manufactures withered before European competition and discrimination. Secondly, we should note the relative economic decline of the Nether~ lands in the course of the 18th century.5 There were many factors at work in this process: the archaic prestige of trade at the expense of in~ dustrial entrepreneurship; the bankruptcy and corruption of the East India Company; and unfortunate involvement in wars. However strong attachment to free fade at horne, the Dutch had sedulously pursued exclusivist and mercantilist policies in the East India, recognising the superior quality as well as quantity of manufactured exports available to their European trade rivals. The East Indian monopoly, while far from complete, had been an important prop of the Dutch East India Company, and through it of the Dutch economy. By the Treaty of Paris in 1784, however, Holland was punished for participation in the American War of Independence by being forced to throw its East Indian possessions open to free trade - something obviously of especial advantage to Great Britain, then in triumphant economic ascendancy. With the decay of its trade, the Dutch East India Company was inexorably driven back into exploiting its territorial acquisition o n _Java for the feudalistic (pre-capitalistic) cultivation of such crops as coffee and sugar. Further misfortunes were to overwhelm the Netherlands in the half century spanning the late l. 8th and early 1 9 t h century - hurniliati-an i n
the Napoleonic Wars; final collapse of their East India Company; secession of the industrialised Southern Provinces (Belglum); British occupation of the Netherlands East Indies under the egregious Raffles; and a
long, savage and debilitating war to re-subjugate .Java in the face of determined local opposition (1825-30). One ought also to include in this catalogue the steady accretion and penetration of British economic
power both generally and regionally. The rise of Britain to global industrial supremacy naturally had major repercussions and ramifications in the Malay world - the third variable. Technological ingenuity, luck, the euphoria and self-confidence of an imperil on the make, naval superiority, possession of the Indian sub-continent, insulation from inadvertent Continental embroilment: all these -- and other -factors, some seemingly predestined, other disconcertingly capricious, played their part. While Holland
floudered and France languished; while America, Germany and Japan put their own houses in order; Britain confidently strode the oceans. The Malay world felt the impact in a series of steps. In 1786 a British settlement was established on the island of Penang. In 1819 Raffles, peeved at eviction from .Java by a diplomacy he considered insufficiently cognizant. of realities, wheedled the island of Singapore from its rightful heirs and proceeded to found a spectacularly successful entrepot which in fact became the commercial metropolis of South East Asia and an essential link in much of the rest of Asia's international trade. The Anglo-Dutch Treaty of 1824- formalised the changed circumstances. In effect, it partitioned the Malay world south of the Sulu Sea into a Dutch sphere of influence and a British. Britain evacuated Sumatra and in return Holland pulled out of the historically important port of Malacca on the west coast of the Malayan peninsula, and recognised
Britain's right to Singapore. A few minor anomalies notwithstandin (the boundary between British and Dutch Borneo was not 'finally until 1.9126), the Treaty granted to Britain all that is now Mala.ysia and Singapore, and to Holland all that is now Indonesia. Of great significance
was the article aimed at the exclusion of third powers: " H u l l region was to be ". at any tim e transferred to any other power. In case of the said possessions being abandoned by one of the present contracting parties, the right of occupation thereof shall immediately pass to the other." Britain's trade with China was growing rapidly, and apart altogether from the intrinsic economic interest of South East Asia - it was absolutely vital for the British Empire overall that the sea routes between China on the one hand and India and Europe on the other be kept open. lt followed that it was in the British interest to find a modus vivendi with a restored Dutch power in the key Malay region commanding the
sea routes. Conversely, Holland, tottering economically after a couple of centuries of greatness, had need of support and approval. It was, of course, an uneasy partnership, much given to stress and strain.
MA RITIME SOUTH-EAST ASIA
For roughly fifty years after conclusion of the Treaty of 1824 the two European powers went their separate ways in exploitation of. their
respective spheres of influence. Britain - in the heyday of her industrial growth and leadership required but tree trade to capitalise upon the region. From the Straits Settlements of Penang, Malacca and Singapore, Britain could take advantage of any economic opportunity going. Holland, on the other hand, bankrupt and industrially backward, perforce had to pursue monopolist and rnereantalist policies culminating as far as the East Indies were concerned in the Consignment and Cultivation ..-..
systems.7 Unable to compete with British goods and British shipping, and lacking the capital to open up Indonesia in a capitalist fashion, Holland logically resorted to a strategy of which the most important cornponents were: one, a semi-state trading company (the NHM) t o which a virtual monopoly of all the trade of the archipelago that could be con~ trolled was entrusted; two, ajealous protection of the East Indies market for Dutch goods; and, three, turning the lab our of the Javanese into capital by forcing them to grow commercial crops for the NHM to export and realise in the commodity markets of Holland. It was thus hoped to restore the Dutch mercantile marine, build up industry in Holland, and restore the fortunes and social capital of the metropolis on the
sweated slavery of the Javanese peasantry. Outside Java, during this period, the Dutch were content to maintain the status quo by the exclusion of foreign power and influence. Britain, for her part, naturally f a v o r e d Holland in any situation threatening to bring one of the more dynamic and thrusting new industrial and
such as Germany or the United States, into the comfortably partitioned Malay world-
. . . t
. . . E
By the end of the third quarter of the nineteenth century, however, drastic changes had become inevitable. Imperialism had reached a new stage in its development. Competition for colonies and outlets for foreign investment, for markets, and for access to raw materials, was intensifying among the growing number of industrial and industrialising powers. Britain and Holland, dominating a region peculiarly suited to many of the new demands that were arising or accelerating (tin, rubber, petroleum, for instance), could no longer rest on traditional laurels. The result was the so-called "forward movement". The aim was to establish de facto as well as de jure territorial control throughout the region in order to prevent other powers entering and to secure effective disposal of the land and other real resources. By a series of steps after signing of the Pangkor Engagement in 1874, Britain moved into the Malay states of the peninsula and in effect took over their administration in favour of Western, and specifically British, economic interests (though assigning
MALCQJ M CALD WELL
an important subsidiary role to the Chinese). Control was not accomplished unchallenged: from the Perak War of 1875-76 to the Trengganu Rebellion of 1928, Malay resistance to alien occupation sporadically flared in armed resistance. For Holland, a smaller military power in the first place, the task of subjugating the far-flung and extensive Outer Islands was a much more arduous one, necessitating prolonged and bloody campaigns, culminating in the bitterly fought Achiness War (officially dated 1873-1908, but the Achinese never in fact surrendcred).8 The Aehinese War is of great interest for a number of reasons. In the first place, Acheh - a traditionally proud, independent and commercial state - had at first been excluded from the 1824 Treaty in recognition of its status and claims.
Secondly, the long and ruthless war waged by Holland foreshadowed in a remarkable way those later waged by the United States against the peoples of South East Asia;9 in particular, we may note one of the earliest examples of "counter~insurgency" scholarship in the role played by the Dutch scholar of Islam, Snouck Hurgronje.10 Finally, the rising power ofjapan enters the picture: ]apart's victories over Russia in the 1904-5 war so impressed Achinese leaders that they tried to make secret contact with Japanese representatives in Singapore in order to ask for help in prolonging resistance to harsh Dutch rule (women and children were frequently taken hostage to exert pressure on men in the guer~ rill). The last quarter of the nineteenth century andthe pre-i9ll years o-f the twentieth marked the high-tide of classical European imperialism. Economic "development", as measured by statistics of production and export of commercial crops and non-renewable real resources, was phenomenal in both Malaya and Indonesia. Evidence is lacking, however, that such "development" was for the good of either the indigenous
peoples or the long-term interests of the local economies, questions into
which we cannot on this occasion go. What is of more immediate relevance is to consider the different policies of the British and Dutch as reflecting their economic specifics, and the embryo of the new in the womb of the old. . Although the Dutch had ultimately to concede that their statist monopoly system was a failure and a shackle upon urther development, their metropolitan and colonial capitalists by themselves were unable to take full advantage of the gradual establishment of free trade in the East undies after mid-century, The opening up o_f the archipelago was, there-
fore, conducted as an international operation, wit rl i 1, American, German, French, Belgian, Swedish and other capitals involved. American participation was particularly significant, US interests early making in-
MARITIME SO UTH-EAST A SIA
roads into the oil industry and plantation rubber. Britain was in a stronger position economically and as a result was able to retain in metropolitan control a greater proportion of Malayan trade and investment. The long-term implications of this distinction are of some interest and importance, for while US influence has - cuckoo-like - now almost completely ousted Dutch from Indonesia, the struggle between declining British imperialism and dominant American is only now being decided in the Malayan peninsula. The other portent of significance for the future was the appearance in the region of Japan as a trading force to be reckoned with. The first world war acted as a forcing house for developments already evident. It accelerated the relative decline of the old European colonial powers, such as Britain and Holland, and conversely hastened the development of the new contenders for the rich Malay prize in South East Asia, America and Japan. With "normal" [i.e. colonial) trading patterns disrupted by the European imperialist war, both the United States and Japan, Pacific powers less affected in industrial and shipping capacity by the conflict and in particular less embarrassed economically by military interruption of the Atlantic and Euro-Asian sea routes, significantly increased their share of` the trade of.the region. It was an economic advance never more than partially turned back by re-assertion of Anglo-Dutch primacy at the conclusion of hostilities. A new pattern of struggle for influence emerged. It was a more complex one than previously. Holland and Britain were to fight a desperate rearguard action while the US and .Japan waged aggressive and confident economic warfare. Most significant of all, however, for the long term was the emergence and consolidation of nationalist forces looking to a post-imperial future - forces, be it at once conceded, varying enormously in potential, seriousness, level of political consciousness, and degree of true mass base. The Netherlands and Great Britain had had, by the inter-war period, over three hundred years of rivalry and uneasy partnership in the Malay
world. Even in face of the determined threat of the rising imperialisms ofjapan and America it was hard for the two older powers fully to co~ operate in self-defence. For instance, when the British, fearful of falling rubber prices (for the metropolitan economy depended to remarkable degree upon Malaya's rubber proceeds for viability) instituted the Stevenson restriction scheme in 1922, Dutch planters and Indonesian smallholders alike rushed to plant up additional acres in anticipation of rising prices. Naturally, whatever the short-term benefits this brought
to the Netherlands East Indies, it was ultimately suicidal. When, then, commodity prices really plummeted in the aftermath of the American crash, England and Holland were forced into co-ordinating their econom-
MA LCOLM CA LD WELL
ic defenses -.- not only in rubber but in other commodities (notably tin) as well. Anglo-Dutch control over vital industrial inputs such as tin and rubber did not, of course, go unnoticed in the United States, t h e major consumer of both. Indeed, American anger at what they regarded as deliberate attempts to hold them to ransom and exclude them from the international economy formed a powerful incentive in US war-time planning for the shape of the post-war international economic system." Anglo-Dutch co-operation against the United States was parallelled by their actions, less co-ordinated this time but similar in intention and effect, directed against Japan. .Japan's trading competitiveness made her an alarming threat; .Japanese goods were not only cheaper - an important consideration as local incomes shrunk with the contraction of the export sector in the inter-war depression ...... but increasingly of as good quality as the European and American equivalents, and backed up by superior and more eager sales and servicing facilities. Moreover, neither the old colonial powers nor America (already involved in Indonesian oil and well aware of its potential) could overlook the almost uncanny correspondence between ]apart's raw material needs and South East Asia's resources. Slighting it may have been to the pride of Holland and Britain, but they perforce had to recognise that, while they could take parallel unilateral steps to exclude or reduce .Japanese exports to their colonies, they could not, b y themselves, cope with the overall challenge .Japan posed to their regional hegemony. It was the United States which had to undertake the broad diplomatic initiative to accommodate, restrain, or - in the final analysis - militarily block Japan. The second world war virtually completed what the first had begun. The set»backs suffered by Holland and Britain were this time much more sensational, radical and irreversible. Not only were the two old colonial powers now to all intents and purposes at the mercy of the United States, whose economic and military "aid" sustained them both at home and in their dependencies, they were also now laced with nationalist movements incomparably strengthened by the twin experiences of an economic depression the colonial authorities had been powerless to avert
and an occupation they had been equally powerless to prevent. Japan, for the time being, was out of the picture, and it was the United States that completely dominated the region in a way that no single power
had ever before done so, with the possible fleeting exception oll.Japan for a few months in 1942 and 1943 (though this was an illusory domin-
ance dependent for consolidation upon British collapse in Europe and
US acceptance of a solo Japanese sphere of influence in South East Asia). Granted that China was "lost" to the "free world" - a working assumption US policy-makers had realistically to incorporate in their thinking
MA RITIME SO UTH-EAST ASIA
from the end of the war the question was where the frontier of American empire in Asia was to run if .Japan was to be assimilated and the wealth of South East Asia (essential to Japan and attractive to the States) secured. Numerous considerations pointed to Vietnam and Korea as the key locations. With these firmly controlled, Washington might move to optimise the profit to be extracted from the conjuncture of South East Asia and .Japan and unchallenged US hegemony over the whole area. The hegemony did not, in the event, go unchallenged of
course, but it is outside the scope of this paper to deal with developments in the Philippines and mainland South East Asia where indigenous social revolutionary forces contested the American right to treat the region as a neo-colony. Obviously, American tactics within the framework of'broad regional strategy were flexible. This may be clearly illustrated in the case of Malaya and Indonesia. France, Britain and Holland had acted in cornplete concert throughout the war when it came to the threat of a possible US move to displace them under guise of some "anti-colonial" subterfuge. Washington came to terms with this obduracy which, in fact, mirrored the desperate objective economic need of the senile old metropoles for their lucrative colonies. As far as Malaya was concerned, American leaders left the job of re-occupation to Britain, whose armed
forces, Special Branch, and administrators showed abundant capacity to carry it out, with ruthless efficiency." Indonesia presented greater problems. The nationalist movement was stronger and - temporarily at least more homogeneous. Dutch power, despite US military and economic aid, and despite a savage and bloodthirsty style of campaign...-
ing reminiscent of the Achinese War,*3 proved incapable of restoring
"order" and "stability" (i.e. a good climate for investment) - nor did it hold out any promise of so doing for the foreseeable future. Moreover_,.Dutch barbarities, which were widely reported by the world's press, were ironical though it may now seem] a source of embarrassment t o Washington. When., therefore, the Indonesian nationalist leader-
ship proved by its actions to be anti-communist, pliable, and prepared business interests, the US quickly switched to aecommoda tactic and, by threat of economic sanctions, drove Holland to the riegotiating table.14 The Americans were not unappreciative of the fact that any prolongation of armed confrontation, regardless of the apprehensive pliability of the nationalist elite, would inevitably redound to the benefit o f the true social revolutionary forces operating in Indo-
nesian society. This is no place for a detailed economic history of the post-war period in the Malay crescent." Rather I should like to conclude with a discus-
sign of the major shifts discernible during this period and prospective for
the next decade or so. Five strands may be detected: first, the decline of the British stake in the region and reduction of the British military presence to a mere token force; second, the virtual elimination of the Dutch stake and Dutch influence after four centuries; third, the rise of the United States to clear predominance; fourth, the emerging challenge of Japan; and, fifth, the surge of social revolutionary forces in the region destined eventually to sweep all imperialisms out and restore political and economic autonomy (with this last should be bracketed the immense
prestige of China and the shining example of the Indochinese peoples' struggle).
Malaysia and Singapore are, let there be no misunderstanding, still very important to Great Britain. British interests are deeply embedded and entrenched in the economics of both states, and the hand of the old colonial power can still be sensed in administration at several levels and in several directions. Foreign companies own a combined rubber acreage in Malaysia greater in area than the entire state of Negri Sembilan, and over 80% of this is still in British hands. British interests still account for the lion's share of the 65% of the Malaysian tin industry in foreign hands. But the writing has long been on the wall, and the unilateral British decision t o "float" the pound sterling in June, 1972, provoked an angry reaction in hitherto compliant Kuala Lumpur. Finance Minister Tan Slew Sin said: "Malaysia has been kicked out of the Sterling Area the Malaysian .Government takes the view that it is free to act in a manner which is in the best interest of Malaysia." Specifically, he announced that Malaysia would now use the US $ rather than sterling as their intervention currency for supporting the value of t h e Malaysian go. Malaysian foreign currency reserves, up to the present banked in London and an important prop of the British economy (actually the main support of British economic recovery after the war), now seem peripatetic. Naturally, as we shall see, it is the United States and.]apari that are picking up the economic slack.
Corresponding t o these economic changes there are military ones.
Over the past five years successive British governments have had to adjust to realities and run-down military commitments "East of Suez". Clinging to the imperial illusion, Whitehall participates still in the "deface" of Malaysia in conjunction with units from Australia and New Zeland and the Malaysian armed forces. Highly-trained British Special Forces can be flown out at short notice to take part in "counter-insurgency" oper-
ations -...- their specialty. The Royal Marine Commando exercise off the west coast of Malaysia in November 1971 was intended to serve as a warning to MCP (Malayan Communist Party) guerrillas increasingly active in
southern Thailand and northern Malaysia that Britain was not yet cornpletely a "toothless bulldog". Nevertheless, the future clearly lies elsewhere. From 1966-67 onwards (i.e. almost simultaneously with news of the British intention to pull out) the US has stepped up its military aid to Malaysia aid in the form of funds, training for Malaysian personnel in the States, and the supply of equipment. US and US puppet troops have, of course, long used the world-infamous facilities of the Jungle Tracking School in.]ohore. American "experts" such as the notorious Professor Samuel Huntington -- hot from such "triumphs" as the urbanisation of' South Vietnam - are now pressing their attentions o n Kuala
Lumpur, while an insidious invasion of US personnel in a variety of forms including the academic) lays the foundations for transformation of
Malaysia from a British post-colony to an American neo-colony." Assimilation of Singapore to the pattern of US neo-colonialism is further advanced than in Malaysia. Singapore acts as executive, expert, clerical and servicing HQ for the regional oil industry, and goes out of its way t o make the island attractive to US investment, offering substantial inducements and promising wage-rates rising less slowly than those of rivals such as Hong Kong, South Korea and Taiwan (or indeed falling). Singapore cashed in on the Vietnamese war at an early stage, and is deeply implicated in the guilt. The leadership of the island republic are well aware of their vulnerability, a mainly Chinese enclave in the predominantly Malay world that surrounds them. The Five-Power Defence arrangement, involving them with Malaysia, Britain, Australia and New Zealand, does not carry much -- if any - conviction (Malaysia has refused Singapore training facilities). Lee Kuan Yew's strategy has, therefore, three other legs: one, creation of a large, well-trained Singa-
porean military (modeled on that of Israel, significantly) - already in comparison with population one of the largest in the world, two, good relations with the United States, including endorsement of its Indo-
china policies, with the Seventh Fleet, the huge Thai air bases, and American military power in general in mind, and, three, totalitarian in* terra control through a fascist-like network of "community" organisations backed up by a ruthlessly efficient secret police (known as the Special Branch, and British-trained). In all this, he has the enthusiastic, if tactically muted, support of the United States. British influence has been steadily dwindling as a result, though by no means negligible as yet. Nor is it likely to become so as long as the UK is such a major participant in the local economy.
It is difficult to think of an example of a metropolitan power being so totally eclipsed in a former colony as is the case with the Netherlands and Indonesia. Since the generals' coup of 1965-66 there has, it is true,
MALCOLM CA LDWEL L
been a tentative and so far relatively unfruitful - rapprochement, including reciprocal Head of State visits and trade talks." The steps by which Dutch economic power and political influence were squeezed out between American pressure and Sukarnoist populism (dependent upon chauvinism and rhetorical leftism) need not detain us here.18 The interesting thing is the variety and flexibility of the means expended by
Washington in pursuit of hegemony in the Indonesian archipelago - an area of utmost sensitivity strategically as well as of great economic attractiveness. Building upon a pre-war investment base, the Americans were quick to proffer "aid" to Sukarno in order to bind him to the "free world" cause, ignoring his anti-imperialist bluster as long as he allowed foreign investment and trade to develop satisfactorily. As the logic of his political position nudged Sukarno towards "anti-imperialist" actions such as the take-over of Dutch enterprises and confrontation with Holland over West l i a n , Washington toyed with armed invasion in support of some much more "reliable" and orthodox pro-Western groups involved in an anti-Sukarno revolt in the oil-rich island of Sumatra; the revolt, however, quickly collapsed of inanition. .But the very collapse opened up other opportunities, vigorously followed up by the US. In the first place, the banker, economist, civil servant and "democratic socialist" "modernisers", thwarted in their revolt, took refuge in hospitable countries such as the United States, where they were educated for their eventual return to Djakarta, this was accomplished in not much longer time than it takes to obtain a US Ph.D degree in economics or political science. In the second place, US tactics inside pre-coup Indonesia now concentrated on the armed forces, and in pary 19 WVcnrking with ticular on the top right-wing leadership of the Army. these materials, the US was in a position to turn the events of 1965~66
(ignoring for the moment the question of the degree of American proximate causal responsibility for the Suharto coup) to maximum advantage. By 1966, then, the United States had edged skilfully into a commanding position throughout the Malay crescent. The use to which this has been put can only be suggested here, for this is no place for a statistical presentation. Obviously there are two conceptually distinguishable poles the economic and the military -.- but in practice the two concerns entangle, merge and coincide, for what the US seeks to ensure are "secure"
countries from the international capitalist point of view. In that perspective, what appear at first glance as separate activities are all ultimately part of the overall concern. A' M Malaysian academic trained in political
science at Harvard or Berkeley is as much a part of the "deface of the free world" as an Indonesian general blessed with special military training at one of the elite camps in the United States. Similarly, American
MARITIME SO UTH-EAST ASIA
"aid" personnel and "experts" (such as those who wrote the Indonesian investment laws and economic plans) are in the end simply part of the same outfit as dedicated gook killers, bloodied in Indochina, who may now be posted as counter-insurgency "advisers" in Indonesia. Carrying the analysis a step further, these layers are but essential infra-structure (the cost borne by the US taxpayer) for the benefit of "free world" and particularly US or US-dominated multi-national - business. . The broad picture that emerges is of American predominance in foreign investment in Indonesia and in the regional off-shore oil industry, and of a growing relative share for US interests in Malaysia," and Sin~ gapore. Militarily, too, America, albeit unobtrusively, increasingly makes the running: the neo~colonial regimes in Kuala Lumpur, Singapore and Djakarta are under no illusions as to where their ultimate protection against internal disaffection and social revolution currently lies (there except that is, of course, no credible external threat to their security associated with internal antagonisms among the three). Washington is, however, pursuing "Asianisation" in order t o placate domestic political pressures. As far as the Malay world is concerned this has a number of aspects. First, it means encouraging the military potential of ASEAN (the Association of South East Asian Nations - presently consisting of the Philippines, Thailand, Malaysia, Singapore and Indonesia). Second, for instance Indonesian trainWashington urges regional bilateralism ing for Cambodian troops and the provision of Indonesian counterinsurgency experts to advise the beleaguered Cambodian army of the Phnom Penh clique (Cambodian troops also train at the Jungle Tracking School in Shore, Malaysia). Third, it means ultimate recognition of the fact that "Asianisation" must entail a growing Japanese responsibility for regional "deface" (i.e. suppression of social revolutions. .--
This brings us to the burning issue of the military and economic resurgence of .Japan. Clearly, "Asianisation" cannot work, even as a shortterm resort, unless the economic and industrial might of .Japan is harnessed. Conversely, the corollary of snreadine Tananese investment 1' r throughout the old "Greater East Asia Co-prosperity Sphere" is a .Japanese military presence. Imperialism and militarism are indivisible. To that extent, US and .Japanese requirements mesh. But the story is, of course, much more complex. In the first place, Tokyo can - and does -- utilize its knowledge of American military need to extort f;: IJ'
gnll:ursu.m-.Inman U. economic concessions beyond those For instance, the US-dominated oil g.i°anis are no hlaijiiigto Tell" Ni
come in on their South East Asian leases, the original purposes of which . . were two~fold: one, to guarantee to acreage for the energy-short future, and, two, to exclude Japan as much _.
as possible from South East Asian oil, so that its oil needs would continue to be met by US-controlled and high price Middle Eastern oil. The pattern of give and take is bound to be duplicated in the years ahead. The giant cannot expect to lie down and lick his wounds without the bastard son waxing stronger at his expense. In the second place, both Tokyo and Washington are plainly conscious of the need to go easy on re-introducingjapan as a military power in East and South East Asia. Malaysia, Singapore and Indonesia all suffered .--. to varying degrees .... from Japanese occupation, and even _Japanese businessmen have to be wary of local hostility. Nevertheless over the last two or three years the tried and tested technique of "leaking" r u m o r s , then denying them, and subsequently admitting that there is something in them after all, has been applied to this problem- People, both locally in South East Asia and internationally, are being conditioned t o accept the inevitable - an overall japanese responsibility for regional "security" (i.e. maintenance of neo-colonialism). A foretaste of the difficulties in store is afforded by immediate, concerted and sharp reaction on the part of the three powers concerned (Malaysia, Singapore and Indonesia) to
the suggestion, frequently mooted in the past but now peremptorily urged, that .Japan should "participate" in the deface of the Malacca Strait (the .Japanese oil jugular). Furthermore, nobody can ignore the pronounced "counter-insurgency" slant of the Japanese re-rnilitarisation programme, it has been alleged that Japanese military personnel have already been introduced to front-line experience in the Bolovens plateau of Laos," while South Korean military personnel are now paving the way for the .Japanese in Indonesia. Such contradictions and obstacles notwithstanding, t h e two great im-
perialisrns in the Pacific really have no option but to continue pursuing the elusive and in the long run unobtainable objective of halting social revolution in South East Asia in the interests of their own limitless rcquireinents for raw materials, markets and investment outlets. The resolution of the intra-imperialist and revolution-reaction contradictions in South East Asia is bound to dominate the next decade, for -.- in the words of a leading Laotian revolutionary
this is the region where the
" . contradictions of our epoch are concentrated, where an unprecedently violent revolutionary storm is breaking loose and shattering the weakest link in the imperialist chain, provoking very deep revolutionary eddies, paving the for the liberation of hundreds of oppressed and
And so we conclude, as we must, with the wave of the future - the revolutionary liberation struggles of the people. American leaders were never in any doubt about the real threat of China: they talked of Chinese
MA RITIME SO UTH-EAST ASIA
"aggression" and "expansionsim", but that was for the gullible public, in reality, as they well knew, it was the example of China that posed the greatest danger to their hegemony in the whole Asian hemisphere. The example continues to exert immense influence throughout the region, while, in addition, the revolutionary struggles of the Vietnamese, Laotian, Cambodian, and Korean peoples point the way for all the peoples of "free world" Asia to follow. It might be thought that the Malay crescent, about which we have been speaking, forms one of the uncharacteristically stable belts in the region, especially since the overthrow of Sukarno and instatement of a "reliable" strong man in Indonesia. Such an impression is very misleading. From the northern tips of Sumatra and Ked ah to the eastern-most reaches of I r a n Barat the people are stirring and social revolution is in the air. In Malaysia, a resurgent MCP is patiently building a trans-communal mass political base and training cadres for revolutionary armed struggle. The controlled panic of the Kuala Lumpur clique is shown by their actions in re-activating many of the procedures of the previous "Emergcncy". Whole divisions in Sarawak (East Malaysian now have "parallel hierarchies", with government forces ostensibly in charge by day and when actual armed security personnel are in situ, but the guerrilla effectively in command at other times. in West Malaysia, the guerrillas have seeped south right down into the jungles ofjohore. The government begs for American investment, but in truth anything thus achieved simply delays the inevitable in a society where feudal oppression, landlessness and rural poverty seek only the correct political brokerage to tie up with urban unemployment, slum squalor and the dissatisfaction of the "over-educated" t o generate a revolutionary ex-
plosion. Nor is Singapore secure. The casual visitor -- or the resident insulated from realities --. may have the impression of a model city state. But the dis-satisfactions are only just below the day~to-day surface, and might erupt at any time. Secret police, suppressed labour organisations, longterm political prisoners, falling real wages, and an ostentatious luxury on the part of the local and foreign elite (with the Americans increasingly
to the fore) spell ultimate collapse for Lee Kuan Yew's PAP (People's Action Party - or, as some call it, Police Against People). It is fitting that; E should end with Indonesia. Indonesia is the core otgouth East Asia, accounting for half t h e population, nearly half the §ggl, and probably a good deal more than half the commercially attrac-
tive non-renewable resources. The obscene satisfaction and self-congratir lotion indulged in by the US with the slaughter of "communists" in the winter of 1965-66 ought to be tempered with sober realisation of what
is to be. He who lives by the sword, perishes by the sword. The harvest of hate fused to a profound national regeneration and revulsion at four hundred and fifty years of subjection to successive "spheres of influence" guarantees to the Indonesian peoples a proud and honorable role in the coming armageddon between Imperialism and the embattled and heroic masses of South East Asia. In the mountains and jungles of' Kalimantan, Sumatra, I r a n Barat, Sulawesi anijava the vangua-rd prepares. South East Asia will no longer be the object of history. Its peoples will shortly resume their historical destiny and spheres of inilluenee" will become a nightmare of the past. FOOTNOTES l.
Adam Smith: Wealth of Nations (numerous editions), Rook II, Chap. v, Book I, chap. ix; Book V, chap. ii; Smith's pioneering study is still worth serious attention for its insights into the inter-relations governing domestic capital investment, the rate of profit domestically, overseas trade and foreign invest-
ment. See G..J. Resink: Indonesia 's History Between the Myths, The Hague, 1968. Assuming among readers some acquaintance with at least the principal works on modern European economic history including the on-going Fontana series, I restrict myself to drawing attention to the following useful reference works on South East Asian history: D.G.E. Hall: A History of South East Asia, 3rd edition, London, 1968; DJ. Steinberg (ed.): In Search o f Southeast Asia, London, 1971; D..].M. Tate: The Making of Mod€rn South East Asia, Vol. I The European Conquest, London, 1971. There is, as yet, no satisfactory economic history of South East Asia-
.].C. Van Lour: Indonesian Trade and Society, The Hague, 1955; M.A.P. Meilink-Roelofsz: Asian Trade and European Influence in the Indonesian Archipelago, The Hague, 1962.
For a useful summary see C.R. Boxer: "The Dutch Economic Decline" in Carlo M. Cipolla (ed): The Economic Decline of Empires, London, 1970.
The extraordinary imperialist activities in Borneo may be approached through
two orthodox bourgeois texts: K.G. Tregonning: A History of Modem Sabah, 188/-1963, Kuala Lumpur, 1965, Steven Runciman: The White Rajahs: A History o f Sarawak from 1841 t o 1946, Cambridge, 1960. See Clive Day' The Dutch in Java, new edition London, 1966;].S. Furnivallz Netherlands India, Cambridge, 1944; M.Caldwell: Indonesia, London, 1968. Dutch officials and military histories, while of course apologetics, nevertheless often yield invaluable information to the perceptive reader; see, for in-
stance, E.S. de Klerck- History o f the Netherlands East Indies, Rotterdam, 1938. Indonesian resistance to the Dutch continued throughout the colonial period - see, for instance, the interesting work by Sartono Kartodirdjo: The Peasants' Revolt o f 8anten in 1888, The Hague, 1966. Including coastal blockade and re-concentration of population. See W-F. Wertheim: 'Counter-zlnsurgency research' -- Drie-Kwar t Eeuw
Geleden, paper prepared for a conference of the Netherlands Sociological and Anthropological Association, April, 1972; c.f. the following uncork sciously (P) ominous judgment made by Tate (see footnote 3 above): "The epic resistance of the Achiness created a great stir in the world of Islam
MARITIME SOUTH-EA ST ASIA
at the time and became a great source of inspiration to future Indonesian nationalists. This prolonged resistance was no doubt the result of the gT€at bravery and devotion to the cause of faith and freedom that inspired the
Achinese. It was also due in part to Dutch ignorance of the country and its people and their inability to assess how much control was necessary to be
effective . . " (op.cit. pp. 233-234). See, e.g. G. Kolkoz The Politics o f War, London, 1969, pp. 246 et. seq. A good history and analysis of the British re-occupation and the so-called "Emergency" remains to be written, though some relevant work is now in progress.
See Jan Pluvier: "Dutch War Crimes in Indonesia", _/'oral o f Contemporary Asia, Vol. II, no. 2, 1972. As Benedict Anderson has recently shown, the conservatism of the leadership of the Indonesian nationalist movement (despite anti-imperialist and "socialist" rhetoric), its overriding fear of social revolution, drove it inevitably into collaborationist postures; see Java in a Time of Revolution, London, 1972. I have tried to outline elimination of Dutch influence and establishment of American in Indonesia in m y article "Oil and Imperialism in East Asia", journal of Contemporary Asia, Vol. I, no. 3, 1971 [also published by The Bertrand Russell Peace Foundation, Nottingham, as Spokesman pamphlet no. 20). For a brief review of growing US influence in Malaysia sec Ron Witten: "Malaysia: Changing Masters", journal of Contemporary Asia, Vol. II, no. 2, 1972. The situation in Singapore is discussed in a jejune but Qtherefore?) very revealing way in Helen Hughes and You Poh Song (ed.): Foreign investment and Industrialisation in Singapore, Canberra, 1969: see especially chapters 7 8a 8. A work of major importance is that of lain Buchanan: Singapore in Southeast Asia, London,l972. See anon: "Hunting with Huntingdon", Dissent, Melbourne, winter 1971-72.
The February~Ma1-ch 1972 talks of the Indonesian-Dutch joint Economic Commission established in 1968 for annual talks yielded only an agreement to sign the minutes, and the chairman of the Dutch side, Dr. van Oorschot, told newsmen afterwards that talks on trade had not yet yielded satisfactory results - see Indonesian News, London, A ril, 1972.
I refer to my article cited in footnote 15 above, and to an essay in M. Selden and E.. Friedman (eds.)' Imperialism in Asia, Pantheon, forthcoming.
The story is a complex one, and by no means yet fully understood, far less documented satisfactorily; nevertheless, it is clear that faction contradictions inside the Army and between the Army a d other wings of the service gave the US invaluable leverage; see W.F. Wertheim: "Suharto and the Untung Coup
- The missing link?",
journal o f Contemporary Asia, Vol. I, no. 2, 1971, and
Ernst Utrecht' "The Indonesian Army as an Instrument of Repression", 20.
journal of Contemporary Asia, Vol. II, no. 1, 1972. It should perhaps be noted that Britain has clung on to something of a predominant position in the north Bornean states of Eastern Malaysia (Sabah
and Sarawak) and Brunei. Portuguese Timor, of course, remains an archaic anomaly in the region. 21.
See Phoumi Vongvichit: Laos and the Victorious Struggle o f the Lao
People against US neo-colonialism, Neo Lao Haksat editions, 1969; go, 22.
excellent book should be read by everyone with any kind of claim to interest in Asia. Vongvichit' op. cit., p. 167-
The Monroe Doctrine and
U.S. Hegemony in Latin America
U.S. expansion has passed through several phases corresponding to different periods in U.S. internal growth and varying according to the U.S.'s capacity to in-
volve itself abroad. In the first half of the nineteenth century, U.S. expansion was largely the product of an expanding capitalist plantation system that required territorial acquisition for its continued growth - hence the early period of U.S. imperialism was largely based on agrarian interests and followed a classical colonial pattern. The early application of the
James F. PetrasH. Michael Eris ran Charles Mills
Monroe Doctrine was confined t o the Caribbean rim, the major area in which the U.S. was heavily involved and capable of policing. The expansion of commercial and banking interests throughout the
Caribbean area by the end of the nineteenth century was combined with an in[lux of U.S. capital and corresponded with the emergence of the now familiar pattern of neo-colonial control. U.S. economic interests controlled the
economy while U.S. policymakers nurtured and promoted client government through military intervention, economic
and diplomatic pressures, and electoral frauds. Throughout the first halt' of the twentieth century, U.S. economic interests began to diversify and to expand
beyond the Caribbean rim into South America, increasingly taking the form of Professor James Petras teaches in the State University of New York a t Bingharnpton. He is a prolific writer on Latin American Affairs. Michael Erisrnan and Charles Mill_c were t w o colleagues
whom he asked to coflabozrate in the preparation
mining initially, and after World War Two extending into the manufacturing sectors, The diversification of U.S. economic interests, the proliferation of diverse forms of interpenetration and association be-
tween Latin American and U.S. elites, and the increasingly complex activities and organisations
THE MONROE DOCTRINE
which they generated made the Monroe Doctrine increasingly difficult to apply and somewhat anachronistic. Hence beginning with the Good
Neighbour Policy and later with the Alliance for Progress, a new policyapproach was elaborated which allowed for consultation and collaboration between the client-states and the U.S. without challenging the latter's hegemonic position in the Hemisphere. The proposals to "multilateralize" the Monroe Doctrine and to organise regional military and economic organisations were attempts to codify and incorporate the multiple relationships which now exist and to allow the U.S. to act on a
variety of levels of decision~makzlng within Latin America, thus offsetting the inereasinrrlv rlifficiilt task o f reactiricr from the mitqirle i n r"ris:ps nerirmdg
with military J America is ruled by regimes "open" to the free flow of goods and capital, the U.S. is willing to negotiate and bargain over the terms of dependency and to allow "joint" participation in regional economic development organisations. When it appears that regimes will seek to increase their political autonomy and to diversify their economic outlets and inputs, the U.S. reverts back to the traditional policy of unilateral decisionmaking and attempts to impose its monopoly over the political and economic relationships in the area. Thus while the Monroe Doctrine has been modified to accommodate to changes and developments within Latin America, these modifications have been conditional and have not diminished - but perhaps augmented- U.S. control within the area. An historical account of the evolution of the Monroe Doctrine and of U.S. economic expansion can throw considerable light on the meaning of specific political formulae adopted to incorporate Latin America within the U.S. "informal" empire and on the dynamic process by which the
relations within the empire have been modified.
U.S. HEGEMONY AND THE MONROE DOCTRINE INTRODUCTION Simon Bolivar once observed that "the United States appears to be destined by Providence to plague Latin America with misery in the name of liberty". What Bolivar was suggesting as a possibility has certainly become a reality -... U.S. behavior toward Latin America, while often couched in idealistic terms, has indeed been oppressive. Almost from the moment of Independence the United States looked upon Latin America as its particular sphere of influence and set out t o establish its control over the area. The United States' hegemonic position, with its attendant exploi-
tation, has contributed to and perpetuated underdevelopment and the inhuman conditions facing most Latin Americans. History has unfortu~ f a t l y show Bolivar to be a prophet.
JAMES F, PETRAS, H. MICHAEL ERISMAN, CHARLES MILLS
A variety of explanations have been offered to account for U.S. be~ haviour. Apologists of U.S. expansion defend the policies of Washington in terms of inevitability, security necessities, or altruism.1 Conversely, critics of U.S. policy and development tend to stress internal dynamics of capitalist expansion as the primary factor influencing the U.S. relations with Latin American countries. This economic ingredient in U.S. imperialism was made graphically evident by Major General Smedley Butler of the U.S. Marine Corps, who stated: I helped make Mexico and especially Tar pico safe for American oil interests in 1914. I helped t o make Haiti and Cuba a decent place for the National City Bank boys to collect revenue in. I helped purify Nicaragua for the International banking house of Brown Brothers in 1909-12. I brought light to the Dominican Republic for American sugar interests in 1916. I helped make Honduras "right" for American fruit companies in 1903 (Gerassi, p. 231)
Butler's statement clearly reveals the interrelation between economic
interests and military intervention - a linkage that has been obscured by latter day defenders of U.S. policy. Our view is that economic expansion has been a major consideration in policy toward Latin America. The justification for U.S. imperial b e h a v i o r , particularly as advanced by Washington's power-wielders, has generally been based on the Monroe Doctrine. The Monroe Doctrine along with its various corollaries and
interpretations has been the policy vehicle which the U.S. has employed to pursue its imperial designs on Latin America. By investigating the Monroe Doctrine's development, its usages, and its relationship to socioeconomic-political forces both within and outside the U.S.,,one can acquire some insights into the nature of the relationship between U.S. imperialism and Latin America. The motive force of U.S. expansion in Latin America is economic self~ interest; the particular economic interests vary, however, shifting from commerical and agricultural to mineral and industrial. The Monroe Doo trine's significance as the basic policy vehicle also varies according t o the world position of the U.S. Up until World War Two, the Monroe Doctrine functioned as a central element in U.S. imperial policies, but its
importance has diminished as the U.S. has assumed global dimensions.
Throughout the 19605, the Doctrine was de-emphasized by Washington. This de-emphasis of the Monroe Doctrine, historically the primary rationalization for U.S. imperialism in Latin America, is not indicative of a change in the nature of U.S. imperialism or its relationship with
Latin America. Quite the contrary, the change has been in style not substance - i.e., the new doctrinal approaches have been introduced and * For sources of citations, see Bibliography.
THE MONR OE DOCTRINE
new programmers such as the Alliance for Progress have been introduced to facilitate U.S. penetration of Latin American societies. Contemporary Latin America remains a prime target for U.S. expansion in the Third World and is still considered by Washington as its special sphere of in-
fluence. The Monroe Doctrine in Historical Per5;Dectzlve The Monroe Doctrine emerged during a period which, from the U.S. perspective, was characterized by considerable instability and uncertainty in the Western Hemisphere. From 1810 t o 1824, most of Spain's colonies fought successful wars to achieve their political independence. Washington considered these new governments unstable and had serious doubts about their ability to maintain their independence if seriously challenged by European powers; Czarist Russia was claiming sovereignty over large areas in the Pacific Northwest; the Holy Alliance, a coterie of reactionary European states led by Austria, Russia, and France, appeared inclined to aid Spain in regaining her lost colonies in the New World ; and England was moving to establish her commercial primacy in Latin America. The U.S. viewed these events with both uneasiness and anticipation. On the one hand, U.S. policy-makers were concerned that attempts by powerful European countries to replace Spain would jeopardize U.S. security and perhaps, ultimately its very existence as a newly independent democratic republic. U.S. policy-makers also recognized that the evolving situation in Latin America also provided the U.S. with the opportunity for territorial and/or economic expansion into Latin America. The tying Monroe Doctrine was Washington's response to this dual situation -.-
its "security" to overseas expansion.2
The Doctrine was a unilateral policy pronouncement set forth by President James Monroe on December 2, 1823, in a message to Congress. Prior to announcing the Doctrine the U.S. government had, at England's request, considering the possibility of joint U.S.-British pledge to co-operate in preventing the Holy Alliance iron intervening in Latin America to re-establish Spanish control. Monroe and most Cabinet members at first favoured a joint U.S.-British initiative, but Secretary of' State .John Adams was adamantly opposed (Perkins, pp. 35»50).- Adams pointed really or out ". . . the object of (the English) appears t o have been especially against the acquisition to the United States themselves of any part of the Spanish American possessions . . By joining her, there-
. . . we give
her a substantial and perhaps inconvenient pledge against
ourselves and really obtai n nothing in return . . . " (Freeman So Nearing 236). Adams wanted to frustrate only English, not Yankee, imperial pretensions. Ultimately, Adams prevailed and the U.S. forged ahead alone,
JAMES F. PETRAS, H_ MICHAEL ERJSMAAL CHARLES MILLS
ignoring the British and particularly the Latin Americans themselves in promulgating the Doctrine.
In the fifteen years prior to Monroe's statement, the Spanish possessions and especially the Spanish Caribbean colonies had become of prime importance to the United States. A rapid rise of American trade with the Spanish colonies took place during the Napoleonic Wars. Decaying Spanish power coupled with the emancipation of large portions of Latin Arnerica underlined the hopes of the United States that gains made during the highly abnormal war years could be made permanent (Whitaker, 24). In the period 1821-25, 31% of US exports were directed toward Latin America - 25% in the Caribbean area alone (Taylor, 452). As an example, Cuba received most of its imports from New England; by far the greatest proportion of tonnage employed belonged to New England, shipowners. Over 1,000 US ships entered Cuban ports in 1824 alone (Whitaker, 129, 133). john Quincy Adams declared in April of 1823 (shortly before Monroe's declaration): "Cuba, almost in sight of our shores, from a multitude of considerations has become an object of transcendent importance to the political and commercial interests of our Union" (Whitaker, 127). The commercial-capitalist forces unleashed by the national-liberation struggle immediately began to shape US foreign policy in the direction of overseas expansion. National independence was a condition for US expansion not a universal doctrine applicable to other areas. A bourgeois national liberation movement in the post-independence period can easily adopt an aggressive overseas expansionist policy, casting aside its own national-democratic rhetoric. The creation of conditions f a v o r a b l e t o US commercial interests was of prime importance in the enunciation of the Monroe Doctrine. The
emancipation of Latin America (coupled with Cuba's probable annexation), it was hoped, would open Latin American markets to US manufacturing and commercial groups (Whitaker, 546). The anti-colonial motives were secondary, and the Monroe policy was in good measure directed toward perpetuating existing US advantages in the area and in laying down the foundations of US hegemony on the continent (Aguilar, 25). The essential ingredients in the Monroe Doctrine include the following points: it prohibited European states from further colonization in the Western Hemisphere; it called for non-intervention, enjoining European countries to forego involving themselves directly (i.e., generally viewed as using physical force) in the affairs of hemispheric nations and pledging
the US to refrain from so interfering into matters concerning the remaining European colonies in Latin America; and it rejected the extension or imposition of European political systems into the Hemisphere, contend-
THE MONR OE DOCTRINE
in that European and American socio-political cultures were basically different and indeed incompatible. Monroe went on to point out that whenever the US determined that the Doctrine had been breached, it would consider the violation a hostile act and would feel free to mount an appropriate response to defend itself. As originally enunciated, the Doctrine had a dual perspective encompassing US-European and USLatin American relations. In regard t o US-European relations, the Monroe Doctrine adopted a tone of self-defence and cloaked its rivalry with European imperialism in the rhetoric of national independence. In the early nineteenth century as an embryonic imperialist and newly independent nation the US was more concerned with consolidating its hold on the North American continent and limiting European expansion than realising its overseas ambitions vis-a-vis Latin America- As the nineteenth century progressed, however, the US-Latin American component of the Monroe Doctrine had the greatest impact, particularly as agrarian and industrial growth exceeded the capacity of the internal US market. In both its intentions and its substance the Monroe Doctrine represented an attempt by the US to incorporate Latin America within its sphere of influence. Washington used the Doctrine to exclude external powers from the Hemisphere in order to have a free hand to impose its politicaleconomic hegemony including annexation of those adjoining Mexican territories such as California which offered the greatest economic promise. Nevertheless, the US did not in 1823 possess the capability to carry out a very vigorous expansionist policy; but this lack of physical means does not obviate the fact that the Doctrlne's ultimate goals were imperialist. Aside from the Doctrine's Intended consequences as envisaged by US policy-makers, the manner in which it was proclaimed
foreshadowed an imperial design: Washington assumed the right to regulate the relations of Latin American states with extra-hemispheric powers. Not only was this claim itself undertaken unilaterally by the US, but Washington's leaders reserved for themselves the sole prerogative to interpret and enforce the Doctrine. I t was such unilateralism which constituted the first clear signs of the Doctrine's imperialist content. To US policy-makers it was immaterial whether the Latin states concurred with Monroe's vision regarding relationships between the Old and New Worlds or whether they accepted US guidance in their foreign affairs ;
the US on its own z'nz'talatz've, infringing on the sovereignty of other hemispheric nations, sought to impose a political framework which served US commercial interests and wedged Latin America within the US sphere
of influence. Essentially the Monroe Doctrine was a formal decision by the US to base its foreign policy on traditional spheres of influence politics.
JAMES F_ PETRAS, H. MICHAEL ERISMAN, CHARLES .MILLS
Washington was attempting to imitate the European imperial powers: the Western Hemisphere was to be Washington's private baliwick just as the European states possessed their territorial preserves in Asia and Africa. The original statement of the Doctrine sought specifically to establish US influence or control only over the Latin countries' extra/zemz'5phe1°z`c relations. But in application the spheres of influence thinking underlying the Doctrine represented an implicit claim to general socio-economic-political hegemony. The dominance of the US was t o become much more explicit through various interpretations and modifications in the implementation of Monroe's 1823 message throughout the nineteenth and twentieth centuries. Although there were several incidents after I 823 which apparently
violated Monroe's dictum,3 the US did not see fit to invoke the Doctrine and as such it lay dormant until resurrected by President James Polk in
1845. Spurred by domestic socio-economic pressures, the US in the late 1830s and 1840s became engrossed in a drive toward territorial expansion involving the Mexican territories of Texas and California. Despite incipient industrialization, United States foreign trade in the period 1816 to 1860 increased at a faster rate than Great Britain's, the most industrialized nation of' the age. In this period, the total value of US foreign trade increased by 230%, while that of Great Britain increased by 205% (Taylor, 177). The driving force behind this trade boom was an expanding, vigorous, export»rninded agricultural sector. Wheat and cotton were the two primary commodity exports. Expanding Latin American markets was of prime importance to American wheat producers who could not compete ellllectively in European markets. Had it not been for the West Indies and South America, flour exports would have been seriously affected (Taylor, 187). Wheat, however, was of peripheral importance in relation to cotton. For more than a generation cotton carried the bulk of US international payments loads (Williams, 7). By 1860 cotton constituted over half of the total value of US domestic exports (Taylor, 185). US economic development required the opening of additional lands to cotton and slavery to increase US export earnings. The annexation of Texas was a means of enhancing the growth of cotton which in turn pressured US policymakers to seek new markets abroad. The pressures for markets and land exerted by the agricultural interests, and most especially by the South's need f o r more slave territory. were complimentary and reinforcing economic engines of expansion driving the US toward territorial annexation (Williams, 8). US expansionism did not, however, proceed unopposed. France and
THE M Q N R OE DOCTRINE
especially England perceived the US as an imperial competitor and threat to their Latin American interests and to the existing hemispheric power balance. Consequently, both European countries attempted through dip-
lomatic measures to prevent the US from annexing Texas. They implored the new state to maintain its independence and even considered jointly guaranteeing continued Texas autonomy. European intervention in
California was in reality minimal, but Washington was nevertheless very much alarmed Br r u m o r s that England was attempting to buy the region from Mexico. President Polk responded to these European Inanoeuvres, whether real or imagined, by reviving and expanding the Monroe Doctrine. In a message to Congress on December 2, 1845 Polk reasserted the Monroe Doctrine and then added two new elements to it which became known as the Polk Corollary. First, he expanded the concept of European non~intervention by forbidding external powers to interfere dipZomatieally into relations between American states. Second, he extended the non-colonization idea b y stating that henceforth Latin nations could
not voluntarily accept European dominion and by incorporating into the Monroe Doctrine a modified no-transfer principle which prohibited Latin countries from ceding any or all of their territory t o an extrahemispheric state.4 The Folk Corollary made it abundantly clear that the US intended to use the Monroe Doctrine to serve as the policy vehicle for imposing US hegemony over Latin America.. Polk's basic thrust was to extend the regulatory prerogatives claimed by the US regarding all relations between Latin nations and extra-hemispheric states. I n particular, Washington for the first time openly asserted the right t o control Latin initiatives toward external nations. In the original Monroe Doctrine the US had limited it-
self, at least in its explicit claims, to restricting the activities of European powers that attempted to intervene directly in Latin America. However, with the Polk Corollary the US imposed a policy directly on the Latin nations, threatening them with US intervention should they decide to undertake certain actions (e.g., ceding territory) toward outside powers. In the context of colonizing and annexing Mexican territory Washington
was, through the Polk Corollary, justifying its own imperialism in Latin America by contending that it was simply trying t o prevent European neo-colonialismThe Polk Corollary served as the policy basis for the Mexican~American War of 1846-1848. By insisting that extra-hemispheric nations could not
intervene in any way into relations between American states, even when those relations involved US expansion, and by rejecting prior to the fact the legitimacy of any transfer of American territory to outside countries,
JAMES F. PETRAS, H MICHAEL ERISMAN, CHARLES .MILLS
Washington preserved such territory for possible US take-over. The Polk Corollary provided a rationale for annexation when Washington deemed such action feasible. Having thus established a policy framework to facilitate US imperialism, Polk embarked on the Mexican~A1nerican War and seized vast areas of Mexico, including the coveted territory of California.
Early on, US expansionist policies whether colonial or neo-colonial were always cloaked in the rhetoric of anti-interventionisrn; imperialist ideology was rarely explicitly embraced as the rationale for expansion. On the contrary, during the latter half of the nineteenth century US expansion was usually posed in anti-imperialist terms - US expansion was always presented in terms of "security" or of "self~defence" against
European expansion. Thus the myth grew in the US of the virtuous selfmade continent opposed to the decadent inriberial Europe - a myth
which allowed the US to impose its policies and establish client-states in the Caribbean while posing as an upholder of national self~determination to its people and the world. After the Civil War the United States entered an era of rapid indus trialization. The absence of a deep rooted feudal structure, vast natural resources, a growing hard-working population, and rapid technical progress combined to transform the US economy within a few decades. Toward the end of the nineteenth century American farmers and manufacturers reached a stage when a production surplus had been created which could not be disposed of in the home markets. In its need for markets the US turned to Latin America (Freeman & Nearing, 242). The emergence of the US as a modern industrial state marked the transition of American policy in the Hemisphere from one of direct annexation to one of indirect control and commercial hegemony. Because of US economic power it was no longer necessary to militarily subdue nations except when popular revolts occurred. The Monroe Doctrine would play a major role in the establishment of this "informal empire". American commercial activity rose precipitously in the late nineteenth century. In 1880 the foreign commerce of the US had reached a value of $93 million; by 1898 it had risen to #223 million (Freeman & Nearing, 242). Increasingly the United States wished to displace European (and especially British) industrial, financial and commercial competition in the Hemisphere. In 1889 Secretary of State James G. Blaine tried t o secure, through the sponsorship of Pan Americanism, supremacy for the US in Latin America through the formation of a customs union in which
"the United States, supplanting Europe, should become the industrial provider of the agricultural nations in Latin America." (Freeman & Nearing, 244). The Blaine plan was ambitious for its day considering the
THE MONROE DOCTRINE
United States itself was still dependent on Europe for the capital necessary for the exploitation of its own vast resources. Blaine did, however, set forth the primary design of US-Latin American policy for the next fifty years, a design echoed in the words of Senator Beveridge: "The trade of the world must and shall be ours . . we will cover the ocean with our merchant marine. We will build a navy to the measure of our greatness Our institutions will follow out flag on the wings of our commerce." (Aguilar,4l.) The grandiose imperial pretensions which the US attributed to the Monroe Doctrine were vividly demonstrated by the Orkney Declaration of 1895. The Declaration arose from a long-simmering boundary dis» pure between Venezuela and British-controlled Guiana which intensified when England, spurred by the discovery of gold in the contested area,
moved decisively into Venezuelan-claimed territory. London rejected Washington's demand that the controversy be submitted to arbitration and a direct confrontation ensued, the US insisting that the English categorically rejected the Doctrine's validity. I t was within this context that Secretary of State Richard Orkney announced in 1895 that: Today the United States is practically sovereign on this continent, and its fiat
is law upon the subjects to which it confines its interposition. Why? . . . It is because, in addition to all other grounds, its infinite resources combined with its isolated position render it master of the situation and practically invulnerable as against any and all other powers.
All the advantages of this superiority are at once imperiled if the principle be admitted that European powers may convert American states into colonies or provinces of their own. (Mecharn, p. 64]
Ultimately the British capitulated, agreed to arbitration, and thereby informally recognised the Monroe Doctrine's relevance to such controversies. In many eyes Olney's proclamation greatly extended the Monroe Doctrine's scope since it linked the Doctrine with an assertion of US hemispheric hegemony, especially with respect to relations between Latin states and outside powers as well as internal policies. In essence
Olney was stating that US interests, as defined solely by Washington, were legitimately the paramount interests in the Western Hemisphere and tha t any action to protect them was fully justified under the Monroe Doctrine. Subsequently, the US did not hesitate to exercise its selfinterests. In 1898 the US milila' proclaimed fiat and satisfyI its imperialist |.
tarily intervened against the Cuban rebels' wishes in the War between Cuba and Spain and proceeded, after Spain's defeat, to occupy the island from 1898 to 1902, exacting territorial and economic concessions from
JAMES F. PETRAS, H. MICHAEL ERISMAN, CHARLES MILLS
the Cubans, and then forcing the Cubans to accept a constitution which
contained the Platt Amendment giving Washington in effect an unlimited right (which was later exercised frequently) to unilaterally intervene in the island's affairs. From 1900 to 1903, Washington organised activities leading to a revolt in northern Colombia, resulting in the Republic of Panama which proceeded by granting the US rights on Panamanian Isthmus for a canal. While his proclamation's general tone was certainly sweeping, it would appear that Olney himself viewed it in a more limited light since he seemed to consider it applicable only to situations such as the Venezuelan-British dispute where extra-hemispheric powers were directly in~ v o l e d . Seen from this perspective the Olney Declaration did not drastically expand the Monroe Doctrine because concrete outside involvement in Latin affairs remained a. prerequisite for the US t o exercise its fiat. According to this particular interpretation, then, the US did not have or even claim a free hand to do whatever it pleased in the Hemisphere; US activity was to a certain extent circumscribed because a clear and present external intrusion had to exist before Washington could invoke and move under the Monroe l`)octrme _Bm OlavJ s arrogance and h i s obxlous desire
to enlarge the US imperil in Latin America paved the way for Theodore Roosevelt to undertake the Monroe l)octrine's most drastic extension. In the late nineteenth and early twentieth century, the Caribbean, because of the proximity of its markets and raw materials and its strategic position in relation to the Panama Canal, became the primary area of US activity in Latin America. US investments in the Caribbean rose from 5270 million in 1897 to $1,282 million by 1914. By 1914 the Caribbean absorbed almost four times the total investment of all South America (3365 million). (Faulkner, 74.)
In 1904 Theodore Roosevelt, acting in accordance with the demands of powerful industrial mining, railroad and banking interests, invoked the Roosevelt Corollary as the basis for US military intervention and in order to firmly incorporate the Caribbean area in the US sphere of influence. Under heavy competition from European imperialists who were intervening in Caribbean countries to collect their debts, Roosevelt declared in a message to Congress that: If a nation shows that it knows How to act with reasonable efficiency and decency in social and political matters; if it keeps order and pays its obligations, it need fear no interference from the United States. Chronic wrongdoing, or an impotence which results in a general loosening of the ties of civilized society,
some civilized nation, and in the Western Hemisphere the adherence of the United States to
may in America, as elsewhere, ultimately require intervention by
the Monroe Doctrine may force the United States, however reluctantly, in flag-
rant cases of such wrongdoing or impotence, to the exercise of an international
THE MONR OE DOCTRINE
police power It is a mere truism to say that every nation, whether in America or anywhere else, which desires to maintain its freedom, its independence, must ultimately realise that the right of such independence cannot be separated from the responsibility of making good use of it.
(Gil, p. 70)
The Roosevelt Corollary incorporated the concept o f preventive intervention into the Monroe Doctrine t o undercut European expansion in favour of US expansionist interests. Washington contended that anytime it determined that a situation existed which might conceivably lead an extra-hemispheric power to intrude into Latin America, the US had the right and indeed the duty to execute its own interventionary action. Under this doctrine it was not necessary for a foreign or Latin American government to do anything concrete to trigger a US intervention; all that was required was Washington's unilateral decision that US action was appropriate. In effect the US was claiming that it could intervene in Latin America anytime it felt so inclined. Accordingly the US assumed the role of hemispheric policeman, imposing its hegemony under the guise of keeping the peace, preserving stability, and thereby forestalling foreign intrusions. More to the point, the US military posture in the Caribbean greatly enhanced the expansion of American commerical interests in the area and US investment completely eclipsed European interests in the area. The Roosevelt Corollary represents the apogee in the Monroe Doctrine's development as a policy vehicle for US imperialism; its promulgation unequivocably designated Latin America a sphere of US influence and removed once and for all any doubt that Washington considered Latin sovereignty subordinate to US interests. The intensification of US military intervention in the Caribbean, justi.-.
fied under the Roosevelt Corollary, came in the wake of William Howard Taft's "Dollar Diplomacy" and extended and deepened US economic penetration of the area. US investments in agriculture, mining and petroleum represented an extension of the activities of existing US enterprises producing the same commodities at home or seeking a source of materials for processing-in the US (Berstein, 39). In its early stages the migration of US capital was without political implications; this rapidly changed as US investors acquired extensive economic interest in foreign countries. US investors, backed by diplomatic pressure from the US government, began to make demands on host governments for concessions and privileges. Diplomatic pressure was superseded by more active interference as in the subsidizing of the Panama revolt. I n much of the
Caribbean the supremacy of US capital was ultimately to be insured by armed intervention (Freeman 8a Nearing, 18). US marines would enter
a country "to protect American lives and property", and would, after
JAMES p_ PETRAS, H MICHAEL ERISMAN, CHARLES MILLS
a time, supervise national elections. invariably the new president would be favourably disposed toward the United States, granting profitable concessions t o US firms (Poetker, 74). The pattern of US penetration and intervention is best illustrated in the cases of Haiti and Santo Domingo. American capital moved quietly into Haiti and Santo Domingo through government sponsored loans, through purchase of bank shares and investments in plantations of various kinds (Faulkner, 79). In 1904 to settle the Dominican debt Dominican officials, after much diplomatic pressure was exerted by the United States, allowed the US to take control of the national customs, agreeing that the Republic's foreign debt was not to be increased without the consent of the United States. Political interference reached a peak in 1912 when President Taft forced the resignation of a Dominican President who was hostile to US interests. Ultimately, pressed by the demands of the National City Bank and Equitable Trust Co. of New York, the United States established direct military rule in Santo Domingo in order to assure US investors complete control over the finances and administration of the Republic (Freeman & Nearing 130, 129). A similar pattern emerges in Haiti. US investors (primarily large commerical banking groups) eliminated European creditors, consolidated the public debt and secured co._ntro1 of the national bank, and then pressed the State Uepartment to insure their investment, whenever necessary, through political pressure and armed intervention (Freeman & Nearing, 135) .| The classic 'fusion of military intervention and commercial interests occurred in Cuba. The American-dictated Platt Amendment to the Cuban constitution allowed US intervention i.n Cuba, thus guaranteeing the political hegemony of the United States, which in turn allowed American business to secure valuable economic concessions. American investments in Cuba, guaranteed by periodic armed interventions, rose from $50 million in 1896 to $265 million in 1915. Similarly, US exports 1
to Cuba rose from $27 million in 1897 to $200 million in 1914, making Cuba the sixth largest customer for US exports (Bernstein, 148).
The heavy influx of US capital and exports into Cuba may be attributed equally to the rich natural resources of the island and to the policies of US military occupation forces which periodically granted valuable concessions such as public utilities and paving and sewage to US firms and ensured tariff agreements favorable to American business interests. Having granted concessions during the periods of military rule the United
States felt "morally responsible" for upholding these after the occupation was terminated (Freeman 8: Nearing, 180). By the mid 19205, the ownership of Guba lay almost completely in the hands of New York
THE MONROE DOCTRINE
commercial interests - specifically, the National -City ank. The National City Bank directly controlled (1) the General Sugar Co. largest in Cuba); (2) its Directors controlled the Consolidated Railways
and had immense sugar holdings in the gigantic Cuba Co; and (3) twenty-four branches controlled the financial life of the island -lending money to native planters on sugar security at l 0% interest. US exports prospered as a result of the Reciprocal Trade Agreement of 1903 which guaranteed the United States preferential tariffs in its trade with Cuba (20-40% reduction in the Cuban tariffs and greatly contributed to Cuba's underdevelopment (Bernstein, 147). It was the US monopolization of Cuban markets and domination of virtually every phase of Cuban economic life for the benefit of Arneri~ can investors, which ultimately led t o the reassertion of Cuban economic
nationalism in the late 1950s. By facilitating massive private US investment, extending loans, and/or manipulating foreign trade, Washington created patterns of economic dependence which firmly established US economic hegemony over the nations of the Caribbean and doomed them t o perpetual underdevelopment and exploitation. The Roosevelt Corollary did yeoman duty as a policy vehicle for extending US imperialism in the Caribbean, fastening these countries to the US economy and contributing to US development and Caribbean underdevelopment. A further elaboration of the Monroe Doctrine was the Lodge Corollary of 1912, which complemented the Roosevelt Corollary and filled some gaps not covered in previous interpretations. The Lodge Corollary's formulation marked the Monroe Doctrine's full maturation as a policy vehicle for US imperialism.
The Lodge Corollary, embodied in a Senate resolution sponsored by Senator Henry Cabot Lodge, arose from US concern over r u m o r s that japanese corporation was attempting to purchase Magdalena Bay, an important habour on Mexico's California coast, from a US company which controlled the area. Whether such a transaction constituted a threat to US security, as some said, or not, the situation nevertheless provided a golden opportunity to further clarify the Monroe Doctrine. The Senate resolution declared : When any h a r b o r or other place in the American continents is so situated that the occupation thereof for naval or military purposes might threaten the communications or safety of the United States, the government of the United States could not see without grave concern the possession of such harbour or
other place by any corporation or association which has such a relation to another government, not American, as to give that government practical power of control for national purposes. (Mecham, p. 70).
JAMES F. PETRAS, H. MICHAEL ERISMAN, CHARLES MILLS
The Lodge Corollary expanded the Doctrine's exclusionary noncolonization principle by asserting that foreign economic interests as well
as foreign governments were now prohibited from acquiring land in the Americas. Furthermore, it extended the No-Transfer concept's restrictions on Latin sovereignty to include a US veto over all territorial exchanges between Latins and outsiders; Washington now claimed the prerogative to regulate not only such relations between Latin states and external powers, but also transactions which both hemispheric officials and private actors carried o n with foreign non-governmental economic interests. A violation of these US pronouncements was, from Washington's viewpoint, a sufficient cause for US intervention. The Lodge Corollary, although seldom invoked formally, well exemplified the general thrust and nature of US imperialism in Latin American up to this time. Washington, using the Monroe Doctrine and its various corollaries as the policy vehicle, sought to impose strict guidelines, backed by the threat and often the reality of US military intervention, on the extrahemispheric relations pursued by the Latin states. Ideally all foreign influence in Latin America was to be dislodged and excluded. Thus the hemisphere would be open only to US domination. The Colossus of the North could then employ its great economic power, supplemented when necessary by military action to make recalcitrant states amenable to US influence to penetrate and control Latin economies and ultimately the countries' entire socio-political structures. There are three points which summarize this discussion of the Monroe Doctrine as a policy vehicle for US imperialism prior to World War Two. First, the Doctrine as enunciated, interpreted, and applied was an instrument for regional domination - it was directed solely at Latin America
and for most of the nineteenth and early twentieth century remained a sub-regional doctrine affecting the Caribbean but later extended to the rest of South America. The Monroe Doctrine provided a rationale for unilateral action to establish and then preserve Latin America as a sphere of US influence within which Washington could pursue economic expansion. Initially US imperial activities were centred primarily in geographically contiguous areas (i.e. Florida, Texas, and California) and in the Caribbean region (i.e., Central America, northern South America and the Island nations). Concentration on the Caribbean sub-region resulted from short-term choices made by US decision-makers and available power capabilities rather than any restriction inherent in the Doctrine. The Monroe Doctrine was intended to and later did serve as the basis for more extensive US efforts to impose its hegemony throughout the Hemisphere.
Second, the Monroe Doctrine was essentially a reactive policy vehicle.
THE MONR OE DOCTRINE
The physical presence or a clear threat of competing imperial countries was generally considered necessary before the US could take action under the Doctrine. Consequently, the initiative was not held by Washington (except to the extent that the Doctrine deterred interaction between outsiders and Latins), but rather by hemispheric and competing imperial countries. The Doctrine's deterrent function backed by growing US economic and military power was usually sufficient. The policy was designed to, and indeed in some cases probably did, forestall external competition for control over Latin American resources and Latin overtures to foreign governments by creating a fear that the US would invoke the Doctrine to intervene. The idea of an "external threat" was systematically used to permit US intervention (e.g. the Roosevelt and Lodge corollaries], thereby giving rise in due time to an offensive policy couched in "defensive" doctrinal terms. Third, the Monroe Doctrine sewed t o rationalize and facilitate one particular type of activity actual or threatened direct unilateral military intervention. Thus interpreted and applied the Doctrine was a rather restrictive policy vehicle for US imperialism. Its utility as an instrument of control was confined to small, permeable, neighb puring countries easily dominated. Alternative forms of hegemonic control, such as economic support for client rulers or assistance to friendly governments in repressing domestic opponents were not easily fitted into the "unilateral" framework worked out in the Monroe Doctrine and in the corollaries. Insofar, then, as the US employed military action to establish and preserve Latin America as its sphere of influence, the Doctrine was quite useful. But the range of countries and situations to which it could be applied was quite limited. As an imperialist policy vehicle intended to motivate or justify US hegemony on a continent-wide basis the Monroe Doctrine left a good deal to be desired.
THE GOOD NEIGHBOUR POLICY AND THE MONROE DOCTRINE For better than 100 years after its promulgation in 1823 the Monroe Doctrine stood as the touchstone for Washington's policy toward Latin America. US statesmen ostentatiously extolled the Doctrine, interpreting and expanding it so that it could be used to justify their particular activities; Congress, the press, and the public all looked upon it as something akin to a Holy Writ which deserved undying reverence and respect. Indeed the Monroe Doctrine during this period became in many respects
the sacred cow of US foreign policy. But in the late 19208 and 1930s changes occurred - the Doctrine was de-emphasized and began to fade into the background as the Good Neighbour Policy was developed.
JAMES F. PETRAS, H . MICHAEL ERISMAN, CHARLES MILLS
When the Great Depression struck, the US economy contracted dramatically. There was a 46 per cent decline in industrial production, while coal and steel production regressed 28 and 31 per cent respectively. National income dropped from $81 billion to $40 billion between 1929 and 1932, while the total value of exports and imports fell from $9.6 billion to $2.9 billion (Aguilar, 67). The Depression forced the Latins to fall back on their own resources and encouraged national efforts at manufacturing products they could no longer import. US policy toward Latin America began to undergo a change as a result of the depression situation. The emergence of Latin American economic nationalism forced the United States t o strike a balance between the necessity of making some concessions to Latin America
while at the same time advancing the long-term interests of the US free enterprise system (Green, 35). Franklin Roosevelt's Good Neighbour Policy was US irnperialisirfs answer to the Depression and Latin American nationalism. The Good Neighbour Policy was a change in the form of US Latin American policy rather than its content. That is, although the United States continued efforts to further its economic hegemony over Latin America, these efforts were now couched in terms of Multilateralism and cooperation (Aguilar, 70). The Good Neighbour Policy represented an effort to soften the Doctrine's more blatent interventionist aspects. The first movement in this direction was the 1928 Clark Memorandum repudiating the Roosevelt Corollary, Basieallv the Mernorandurn argued that the Doctrine was J designed to deal with external, especially European, incursions into the Hemisphere, its purpose was not to regulate inter-American relations. Therefore Clark concluded that the Roosevelt Corollary, which allowed and indeed encouraged unilateral US interventions in Latin
America even when no plausible foreign threat existed, was incompatible with and should be separated from the Doctrine- In short the Clark Memorandum took the position that unilateral initiatives by Washington were not justifiable under the Doctrine, although a caveat was added stating that such activities were permissible when necessitated by self~ deface. Thus the US had not renounced self-initiated unilateral intervention per se, but had simply indicated that the Monroe Doctrine was
not the proper policy vehicle for such actions. Questions concerning unilateral intervention plagued US policy-makers and especially the Roosevelt administration throughout the 1930s. The Latins were insisting that all intervention - military, economic, and
diplomatic - by one s-tate into another's domestic or foreign affairs be
renounced; Washington equivocated, not wanting to completely abandon the Monroe Doctrine in order not to hamstring itself in intervening to
THE MONR OE DOCTRINE
protect or even extend US economic interests in Latin America. At the Montevideo Conference in 1933 the US rejected "in principle" the right to unilateral intervention, although it narrowly defined intervention to include only military activities and even then insisted that in those instances where international law permitted military initiatives the US would exercise those prerogatives. Hence Washington's renunciation in principle meant little; the US still claimed the right to econoiniodiplomatic intervention (as it acted in overthrowing the nationalist Gray
Government in Cuba in 1933) and indeed even military intervention since international law was manipulated to justify such actions. At President Roosevelt's behest the US did moderate its position somewhat at the 1936 Buenos Aires Conference, accepting without formal reservation a strong non-intervention resolution which prohibited for any reason direct or indirect unilateral intervention into a country's internal or external affairs. However Washington continued to define intervention in purely military terms. More important the US indicated that it would abide by the proposed non-intervention principle only if the Latins reciprocated by accepting the concept of collective responsibility, which meant that multilateral military interventions when sanctioned by Inter-American organisations were permissable. Reciprocity and collective responsibility were key elements in Roosevelt's Good Neighbour Policy. In stressing collective responsibility Roosevelt downplayed unilateral policies such as the Monroe Doctrine and instead sought t o develop multilateral agreements and institutions which Washington could use to maintain hemispheric stability and thereby protect its varied interests. But according to the reciprocity doctrine, if the Latin states shunned their duties by refusing to support collective initiatives, the US was then free to under-
take unilateral action under the Monroe Doctrine or some other rationale (e.g., "self-defence"). Two basic factors converged to produce the Good Neighbour Policy. First, by 1930 US hegemony in Latin America was rather well-established. Washington's many pre-1930 interventions, especially those based on the Roosevelt Corollary, had made the US the dominant hemispheric power. The previous period of intervention and economic penetration created a series of regimes which followed the US lead on most critical issues. Possessing client regimes the US was in a position to discuss "multilateral" organisations since the new mode of decision making would not challenge US hegemony in the area. Prior to 1914, despite the upsurge of American econornic activity in
the Caribbean, European powers, especially Great Britain, remained the primary sources of capital for Latin America (Bernstein, 32). British investments in Latin American are estimated to have grown from 330 mil-
JAMES F , PETRAS, H. MICHAEL ERISMAN, CHARLES MILLS
lion in 1870 to about $3000 million in 1914. In 1914 British investments in Latin America comprised twenty percent of all British overseas investments and 43 per cent of total foreign investments in Latin America. Latin America constituted thirteen percent of French and sixteen percent
of German overseas investments (Bernstein, 36, 38, 40). By 1914 US investments dominated the Caribbean, but equaled only about 20 percent of total foreign investments in Latin America and only about half of the total British investments in Latin America (Bernstein, 39). The First World War greatly expedited the transformation of the United States into a chief creditor nation in the Hemisphere (Freeman So Nearing, 12). During World Wax I, American investments rose fifty per cent while European capital remained at former levels or declined (Bernstein, 10). By-1914 the United States had started a concerted attack on British "laissez faire" imperialism in Latin America. The concept of "laissez faire" imperialism centres on the notion that the control of key enterprises and the domination of foreign trade can securely attach the re» cipient country to the investing nation's financial control and direction, thus making it into a sphere of influence. The central pivot of US policy in Latin America became the displacement of British "laissez faire" imperialism and the subsequent accession of the United States to that position (Bernstein, 119). After World War I the relative value of British trade and investment in Latin America remained static. France and Germany ceased to be important sources of cornbetition (Bernstein, 46, 48)- Only US trade and investment continued to grow. The inflow of capital from the US into Latin America that occurred during World War I paved the way for
a major expansion of US influence in the region during the 1920s. In Argentina, the traditional bastion of British economic power in Latin America, for example, US trade nearly doubled its 1913 level by 1927. The US share of the Argentine market increased from 14.7 per cent in 1913 to 24.7 per cent in 1925 while Great Britain's share fell from 31 per cent to 19 per cent. US capital invested in Argentina rose from 40 million in 1912 to S600 million in 1928, while British investment levels remained static (Tulchin, 80, 81). In the ten years after 1914, US exports in Latin American increased nearly 350 per cent while Britain increased only 18 per cent (Tulcllin, 40). This relative decline of European and particularly English economic influence in Latin America meant that the US enjoyed almost free lien t o consolidate
its primacy without any real threat to outside interference. Roosevelt did not have to worry about building a US sphere of influence in Latin America that task had to a great extent already been accomplished -....-
T H E MONROE DOCTRINE
by economic penetration. Rather he moved to legitimize Washington's existing control, choosing multilateralism and the Good Neighbour Policy as the means to this end. The second basic impetus behind the Good Neighbour Policy was the fact that as the 1930s progressed the US became increasingly concerned about the impending war in Europe and sought to tie the strategic economic resources of the Latin states to the US war effort. Roosevelt therefore backed away from the "big stick" approach to inter-American relations and began trumpeting the need for hemispheric cooperation. Economic interests continued to expand their control over the strategic sectors of the economy and hence US economic interests dominated the key decisions affecting Latin American development. In fact the Good Neighbour Policy an