Question

Question 1: Compare the content of protectionist policies in Germany and France which were applied after 1873 crisis?

Question 2) What is the economic explanations of imperialism? Discuss by considering Lenin’s imperialism theory?

Ref: Book - A Concise Economic History of the World (Rondo Cameron - Larry Neal)

Answer 1

Question 1

The period preceding the Long Depression of 1873 had been one of increasing economic internationalism, championed by efforts such as the Latin Monetary Union, many of which then were derailed or stunted by the impacts of economic uncertainty. The extraordinary collapse of farm prices provoked a protectionist response in many nations. Rejecting the free trade policies of the Second Empire, French president Adolphe Thiers led the new Third Republic to protectionism, which led ultimately to the stringent Méline tariff in 1892. Germany's agrarian Junker aristocracy, under attack by cheap, imported grain, successfully agitated for a protective tariff in 1879 in Otto von Bismarck's Germany over the protests of his National Liberal Party allies. In 1887, Italy and France embarked on a bitter tariff war. In the United States, Benjamin Harrison won the 1888 US presidential election on a protectionist pledge.

As a result of the protectionist policies enacted by the world's major trading nations, the global merchant marine fleet posted no significant growth from 1870 to 1890 before it nearly doubled in tonnage in the prewar economic boom that followed. Only the United Kingdom and the Netherlands remained committed to low tariffs.

Despite the important step European countries took on free trade in the 1860s, this new international regime did not last long. A great depression began in 1873 until 1896. This depression supports the relatively low level of customs duties in Europe.

The transport revolution led to the globalisation of trade and especially agricultural trade in the 1870s, with large quantities of wheat and agricultural products exported to Europe.

It appears that towards the end of the 19th century, competition became really important. The situation is widespread. Increased competition is contributing to a structural decline in agricultural products throughout the world, particularly for European farmers. European farmers facing exports from lowland countries like Australia, the United States and Canada are demanding tariff increases.

This causes a general deflation is deep in European economies for twenty years. Industrialists are also affected by deflation, which is why industrialists are calling for a return to protectionism. These requests led to a great success. The most visible response to the 1873 crisis was a return of continental Europe to protectionism in the last quarter of the 19th century. One speaks of 1879 because it is at this time that Germany behind closed doors are liberal interlude with a new tariff in 1879 changing its mind with regard to trade policy. 1879 is remembered as the end of the free trade period and the beginning of a new protectionist period.

The situation in Germany is interesting, because the crisis plays a decisive role in convincing the Junkers in eastern Germany to support the industrialists. Until then, the Junkers were more in favour of free trade, as they exported their grain via the Baltic Sea. However, with the invasion of wheat in Europe, the Junkers are suffering from falling prices. Bismarck takes the opportunity to operate a new political alliance called the "Rye and Steel Alliance" pushing for a protectionist policy. It should be noted that Bismarck himself is a Junker marking a drastic transition in foreign policy by denouncing the Zollverein treaties. Until now, the ports largely open to imports have made us a dumping ground for the overproduction of foreign products. The idea of dumping is leading the nation into a deflationary spiral.

Question 2

Imperialism is basically an economic system. As Lenin says, it is capitalism in its monopoly stage. Hence, such terms as profits, wages, or exploitation, refer to economic phenomena. This point should be kept in mind. Exploitation refers to the economic sphere not to military or political suppression. In order to understand imperialism it is necessary to understand economics. Marxism-Leninism is the only rational scientific approach to economics. It is the only approach which describes how the imperialist economic system operates. Basically, there are only two approaches to economics or any other discipline: the capitalist approach and the working class approach

One of the theories that has been developed by the capitalist economists to deceive the working class is the theory that workers in imperialist countries are conservative because they have been bought out by the businessmen. This theory was strong in the student movement a few years ago. The right wing of student movement put forward the theory that the wage and salary earners were conservative and were the main support of Imperialism, while the well-to-do students (who would become professionals and managers) were the new revolutionary class. The capitalists acted to support this theory by staging demonstrations in opposition to the student anti-war activities.

The entire working class in imperialist countries is bribed to support the operations of the system, both at home and abroad. The capitalists get the money for these bribes from their exploitation of the people and resources in the underdeveloped countries.

This theory assumes that most of the profits of the businessmen of an imperialist country are made from the labor of the people and/or the natural resources of the colonies. Also, since all the workers of an imperialist country are bribed by some of the profits derived from the colonies, workers benefit economically from imperialism. Thus, imperialism is in the interest of the workers in the imperialist country.

The total output of a society, in goods and services, is divided among the different classes in that society. The wage and salary earner gets part of this total output in the form of wages and salaries; the landowner gets his part in the form of rent; and the businessman gets his out in the form of profits (which includes interest}. Thus profit refers to the part of the total output of society that is taken by businessmen. Now, note that profit refers to (a part of) the output of goods and services which are a product of labor.

The goods and services produced for the wage and salary earners are subtracted from total production. What is left is called the economic surplus. The labor that is used to produce the economic surplus is called surplus labor. The labor that is used to produce the wage goods is called necessary labor. It is called necessary labor because it is the amount of labor necessary to support the working class so that it is possible to produce an economic surplus.

Various motives prompt empires to seek to expand their rule over other countries or territories. These include economic, exploratory, ethnocentric, political, and religious motives.

: Imperial governments, and/or private companies under those governments, sought ways to maximize profits. Economic expansion demanded cheap labor, access to or control of markets to sell or buy products, and natural resources such as precious metals and land; governments have met these demands by hook or by crook .

Imperial nations or their citizens wanted to explore territory that was, to them, unknown. Sometimes they did this for the purpose of medical or scientific research. At other times, they did it for the sense of adventure.

Imperial nations sometimes believed that their cultural values or beliefs were superior to other nations or groups. Imperial conquest, they believed, would bring successful culture to inferior people.

Patriotism and growing imperial power spurred countries to compete with others for supremacy. It’s a matter of national pride, prestige and security. Empires sought strategic territory to ensure access for their navies and armies around the world.

During expansion, religious people sometimes set out to convert new members of their religion and, thus, their empire. Christian missionaries from Europe, for example, established churches in conquered territories during the nineteenth century. In doing so, they also spread Western cultural values. Typically, missionaries spread the imperial nation’s language through educational and religious interactions, although some missionaries helped to preserve indigenous languages