The Liberal and Marxist Arguments for Imperialism
Unique to Market Capitalism
Different from the political, conservative, and social-psychological theories
Time-Bound to the Modern (post 1500) period
1. Market Capitalism leads to increasing concentrations of income
Capital is favored over Labor
Rewards flow to the owners of capital
2. Over time, the decreased incomes at the lower end lead to decreased consumption
The rich buy only a relatively constant amount of "ordinary" products such as food
The poor are the primary consumers of these "ordinary" products
The owners of capital, however, rely on a growing market
A shrinking market reduces the profitability of capital
3. At some point, decreased consumption leads to underconsumption
Underconsumption occurs when there is insufficient demand to sustain a growing market
Demand goes down and bankruptcies occur
The Great Depression is an example of underconsumption
4. Expansion abroad can delay the problem of underconsumption
By producing abroad one can lower the costs of raw materials and sell products at a reduced, but still profitable, price.
By producing abroad one can lower labor costs and sell products at a reduced, but still profitable, prince
By controlling markets abroad, one can capture new consumers
Britain and the Indian textile market
Britain and the opium market in China
5. Marxists argue that expansion abroad is the only solution to underconsumption
Liberals suggest that there is a second way to solve underconsumption: redistribute
The New Deal is an example of redistribution
Marxists do not believe that the rich will ever allow themselves to be taxed
The owners of capital control the state as far as the Marxists are concerned.