In an article published in People's Democracy, newspaper of the Communist Party of India (M), economist Prabhat Patnaik examines how the stagnation of neoliberal capitalism is reinforcing imperialist practices, with the United States increasingly using economic coercion to secure markets in the Global South.
Prabhat Patnaik: US Reinforces Imperialist Drive Through Economic Coercion
Drawing on Rosa Luxemburg's theory of imperialism, Prabhat Patnaik explains that capitalism requires external markets to sustain accumulation and overcome economic stagnation. He writes that acquiring demand from outside the system is âessential for reviving the process of accumulationâ, making an ââexternal marketâ essential for capitalism, and one of the factors underlying imperialism.â
Discussing the limitations of state expenditure under neoliberal capitalism, Patnaik argues that âthe ability of the state to increase aggregate demandâ has been restricted by the internationalisation of finance. He points out that âthe âcontrol areaâ over which the economic jurisdiction of the state can at all be effective and the terrain of operation of big capital in the neo-liberal era are no longer identical.â
Patnaik identifies the current US approach as a new stage in this imperialist drive.
The picture that Rosa Luxemburg had painted, of the capitalist sector of the world annexing as its external market the precapitalist sector of the world, is now replaced at a higher level by the leading metropolitan capitalist economy of the world annexing as its external market the less developed capitalist economies of the world, viz. the economies of the global south.
Rejecting the argument that this represents ordinary capitalist competition, he emphasizes that the US is seeking to establish external markets âthrough coercionâ, replicating practices from the colonial era.
He identifies two principal instruments of this coercion: âthe imposition of one-way tariffsâ and âthe one-way imposition of import obligations.â Under these arrangements, countries of the Global South face US tariffs on their exports while being prevented from imposing comparable tariffs on American goods. They are also expected to meet specific import targets for American products, without reciprocal obligations on the United States.
Pointing to the Indo-US Trade Treaty, Patnaik notes that both provisions were included in the agreement before a US court struck down Trump's trade measures. Although the treaty is being renegotiated and has reportedly been finalized, he warns that âwhen it is made public one would almost certainly see these coercive aspects.â