Imperialism and World Economy
Chapter V: World Sales Markets and Changed Sales Conditions
1. MASS PRODUCTION AND OVERSTEPPING OF STATE BOUNDARIES. 2. PRICE FORMATION UNDER CONDITIONS OF EXCHANGE BETWEEN COUNTRIES WITH DIFFERENT ECONOMIC STRUCTURES, AND FORMATION OF SUPER-PROFIT. 3. COLONIAL POLICY OF GREAT POWERS, AND DIVISION OF THE WORLD. 4. TARIFF POLICY OF POWERS, AND SALES MARKETS. 5. SHARPENING OF COMPETITION IN WORLD SALES MARKET, AND CAPITALIST EXPANSION.
Every "national" capitalism has always manifested a tendency to expand, to widen the scope of its power, to overstep the boundaries of the nation, the state. This follows from the very structure of capitalist society.
The conditions of direct exploitation and those of the realisation of surplus value are not identical. They are separated logically as well as by time and space. The first are only limited by the productive power of society, the last by the proportional relations of the various lines of production and by the consuming power of society. This last named power is not determined either by the absolute productive power nor by the absolute consuming power, but by the consuming power based on the antagonistic conditions of distribution, which reduce the consumption of the great mass of the population to a variable minimum within more or less narrow limits. The consuming power is furthermore restricted by a tendency to accumulate, the greed for an expansion of capital and a production of surplus value on an enlarged scale. This is the law of capitalist production....The market must, therefore, be continually extended....This internal contradiction seeks to balance itself by an expansion of the outlying fields of production. 1)
This law of mass production, which is at the same time the law of mass overproduction, must not be understood to mean that the overstepping of "national state boundaries" is something like an absolute necessity; this necessity is created in the process of profit formation, and the amount of the profit serves as the regulating principle of the whole movement. The amount of the profit depends upon the mass of commodities and the amount of profit accruing to one commodity unit, which amount is equal to the selling price minus production cost. If we use for the volume of commodities the letter V, for the price of a commodity unit the letter P, and for the cost of production per unit of commodity the letter C, we find that the sum total of the profit is expressed by the formula V (P-C). The smaller the production cost, the lager will be the profits per unit of commodity, and, assuming the sales market to be stationary or growing, the larger will be the volume of profit. The cost of production, however, is the lower, the greater the volume of commodities brought into the market. Improved methods of production, expansion of productive forces, and consequently increase in the volume of goods produced, are factors decreasing the cost of production. This explains the selling of commodities abroad at low prices. Even if such sales yield no profits at all, even if the commodities are sold at production cost, the volume of profit is still increased, since thus the cost of production is made lower. (We do not speak here of sales made at a loss for "strategic purposes," i.e. , for a rapid conquest of the market and for the annihilation of the competitors.) In the general formula V(P-C), the volume of production costs will not be that amount which corresponds to the volume of goods designated as V, but a much smaller amount corresponding to the formula V+E, where E is understood to be the amount of exported commodities. It is in this way that the movement of profits compels commodities to overstep the boundaries of state. The very same regulating principle of capitalism--rate of profit--acts in still another way. We have in mind the formation of super-profit under the conditions of commodity exchange between countries having different economic structures.
Even in the epoch of commercial capital this process of the formation of additional profit is perfectly clear.
So long as merchants' capital [says Marx] promotes the exchange of products between undeveloped societies, commercial profit does not only assume the shape of outbargaining and cheating, but also arises largely from these methods. Leaving aside the fact that it exploits the difference in the prices of production of the various countries...those modes of production bring it about that merchants' capital appropriates to itself the overwhelming portion of the surplus product, either in its capacity as a mediator between societies, which are as yet largely engaged in the production of usevalue for whose economic organisation the sale of that portion of its product which is transferred to the circulation, or any sale of products at their value, is of minor importance; or, because under those former modes of production the principal owners of the surplus product, with whom the merchant has to deal, are the slave owner, the feudal landlord, the state...and they represent the wealth and luxury. 2)
In these conditions "outbargaining" and "cheating" were able to play such an important part because the process of exchange was irregular, because it was not the necessary process of "metabolism" in a society with a world wide division of labour; on the contrary, it was a more or less accidental phenomenon. However, additional profit is obtained also at a time when the international exchange of commodities already becomes a regularly recurring moment in the reproduction of world capital. Marx gave a complete explanation of the economic nature of this super-profit in the following statements:
Capitals invested in foreign trade are in a position to yield a higher rate of profit, because, in the first place, they come in competition with commodities produced in other countries with lesser facilities of production, so that an advanced country is enabled to sell its goods above their value even when it sells them cheaper than the competing countries. To the extent that the labour of the advanced countries is here exploited as labour of a higher specific weight, the rate of profit rises, because labour which has not been paid as being of a higher quality is sold as such. The same condition may obtain in the relations with a certain country, into which commodities are exported or from which commodities are imported. This country may offer more materialised labour in goods than it receives, and yet it may receive in return commodities cheaper than it could produce them. In the same way a manufacturer, who exploits a new invention before it has become general, undersells his competitors and yet sells his commodities above their individual values, that is to say, he exploits the specifically higher productive power of the labour employed by him as surplus value. By this means he secures a surplus profit [ italics ours . - N.B. ] ; on the other hand, capitals invested in colonies, etc., may yield a higher rate of profit for the simple reason that the rate of profit is higher there on account of the backward development, and for the added reason that slaves, coolies, etc., permit a better exploitation of labour. We see no reason why these higher rates of profit realised by capitals invested in certain lines and sent home by them should not enter as elements into the average rate of profit and tend to keep it to that extent. 3)
Marx, proceeding from the theory of labour value, gives here an explanation of super-profits. From this point of view, additional profit has its source in the difference between the social value of the goods (understanding under "society" world capitalism as a united whole) and their individual value (understanding under "individual" the "national economy"). Furthermore, Marx foresaw and explained cases where a certain fixation of additional profit goes on, namely when a certain territory is dominated by monopoly organisations-cases that are particularly important in our times.
It is thus obvious that not the impossibility of doing business at home, but the race for higher rates of profit is the motive power of world capitalism. Even present-day "capitalist plethora" is no absolute limit. A lower rate of profit drives commodities and capital further and further from their "home." This process is going on simultaneously in various sections of world economy. The capitalists of various "national economies" clash here as competitors; and the more vigorous the expansion of the productive forces of world capitalism, the more intensive the growth of foreign trade, the sharper is the competitive struggle. During the last decades quantitative changes of such magnitude have taken place in this realm that the very quality of the phenomenon has assumed a new form.
Those changes proceed, so to speak, from two ends. On the one hand, the process of mass production is becoming extremely accelerated, i.e., the volume of commodities seeking for a foreign market is increasing-a phenomenon highly characteristic of recent times; on the other hand, the free market, i.e., that section of it which has not been seized by the "great power" monopolies, becomes ever narrower. Moved by the requirements of home capital, the great powers very quickly subjugated the free territories; beginning from 1870-1880 the process of "territorial acquisitions" went on at a feverish tempo. For our purposes it is sufficient to give a brief account of the results of the "colonial policy" which has become a veritable mania of all modern capitalist states.
England, a country with a vast state territory, has, after 1870, succeeded in annexing a whole series of new territories: Baluchistan, Burma, Cyprus, British North Borneo, Weihai-Wei, the territories adjoining Hongkong in Asia; it increased the Straits Settlements; it took Koweit under its protectorate (1899) ; it acquired the Sinai peninsula, etc.; it annexed some islands in Australia, also the southeastern part of New Guinea, the major portion of the Solomon Islands, and the Tonga Islands. In Africa, where competition and seizures were going on with particular intensity, England acquired Egypt, the Egyptian part of Sudan with Uganda, British East Africa, British Somali, Zanzibar, and Pemba; in Southern Africa, the two Boer republics, Rhodesia, British Central Africa; in Western Africa, outside of increasing the former colonies, it occupied Nigeria. 4) Such were the "successes" of England.
France acted no less "successfully."
Beginning with 1870 [we read in a work of a French imperialist] we witness an actual colonial regeneration. The Third Republic placed Annam under its protectorate, it conquered Tongking, it annexed Laos, it extended a French protectorate over Tunis and the Comoro Islands [near Madagascar - N.B. ], it occupied Madagascar, it increased its possessions in Sahara, Sudan, Guinea, the Ivory Coast, Dagomea, the Somali coast, out of all proportions [démésurement], and it founded a new France extending from the Atlantic Ocean and Congo to Lake Chad. 5)
By the end of the nineteenth century the area of the French colonies was nineteen times the area of France proper.
German imperialism appeared later in the arena, but it made haste to regain lost time. The beginning of Germany's colonial policy dates back to 1884. It conquered Southwestern Africa, Cameroon, Togoland, East Africa, it "acquired" New Guinea and a number of islands (Emperor Wilhelm's Land, "The Bismarck Archipelago," the Caroline Islands, the Marianas, etc.); in 1897 it seized Kiaochow, it made ready to grab sections of Turkey and Asia Minor-all this "evolution" being accomplished with feverish haste. 6)
As to the Russian colonial policy, we wish to remind the readers of the conquest of Central Asia, of the Russian policy in Manchuria and Mongolia, and lately in Persia, the latter being accomplished with the aid of England (Colonel Liakhov is its hero). 7) The same policies are pursued also by countries in other hemispheres, the most important of which are the United States and Japan. In consequence of this "division" of free lands, and with them, to a large extent, of free markets, world competition among the "national" capitalist groups was bound to become exceedingly sharpened. The present distribution of territories and populations is illustrated by the following table:
Patents Granted
Colonies "Home" Totals
1876 1914 1914 1914
Area Pop. Area Pop. Area Pop. Area Pop.
Britain 22.5 251.9 33.4 393.5 .3 46.5 33.8 440.0
Russia 17.0 15.9 17.4 33.2 5.4 136.2 22.8 169.4
France .9 6.0 10.6 55.5 .5 39.6 11.1 95.1
Germany .... .... 2.9 12.3 .5 64.9 3.4 77.2
U.S.A. .... .... .3 9.7 9.4 97.0 9.7 106.7
Japan .... .... .3 19.2 .4 53.0 .7 72.2
Total 40.4 273.8 65.0 523.4 16.5 437.2 81.5 960.6
Colonies of other powers (Belgium, Holland, etc.) 9.9 45.3
Semi-colonial countries (Persia, China, Turkey) 14.5 361.2
Other countries 28.0 289.9
Total Area and Population of the World 133.9 1657.0 8)
Thus between 1876 and 1914 the great powers acquired about 25 million square kilometers of colonial lands, in area twice the size of Europe. All the world is divided among the "economies" of the great nations. This explains why competition is becoming unbelievably sharp, why the pressure of capitalist expansion on the remaining free lands increases in the same ratio as the chances for a grandiose free for all among the large capitalist powers. 9)
The tariffs only tend to increase such chances. The tariffs are barriers that stand in the way of the import of commodities; they can be overcome in one way only: through pressure, through the use of force. Tariff wars are sometimes practiced, as a preliminary, i.e., rates are increased in order to extort concessions. Such tariff wars, for instance, were waged by Austria-Hungary against Roumania (1886-1890), Serbia (1906-1911), Montenegro (1908-1911); by Germany against Russia (1893-1894), Spain (1894-1899), and Canada (1903-1910); by France against Italy (1888-1892) and Switzerland (1893-1895) , etc. The quicker the free markets are "distributed," the quicker are they included within the tariff walls; and the more ferocious competition becomes, the sharper are the tariff clashes between great powers. Tariff wars, however, are only partial sorties, they are only a sort of testing the ground. In the long run the conflict is solved by the interrelation of "real forces," i.e., by the force of arms. Thus the race for sales markets inevitably creates conflicts between the "national groups of capital." The enormous increase in the productive forces, coupled with the shrinking to a minimum of free markets in recent times; the tariff policy of the powers, connected as it is with the rule of finance capital, and the mounting difficulties for realising commodity values-all this creates a situation where the last word belongs to military technique.
The contradictions of capitalist development, as analysed by Marx, become apparent. The growth of productive forces clashes with the antagonistic form of distribution and with the disproportion between the various parts of capitalist production-hence capital expansion; on the other hand, socialised labour clashes with the organisation of capital as private business, which expresses itself in competition between national capitalisms. Equilibrium and a harmonious development of all parts of the social mechanism are lacking; in recent times more so than at any other; hence terrific crises and precipitous changes.
1) K. Marx: Capital, Vol. III, Untermann's translation, pp. 286-287.
2) Ibid., p. 389.
3) Ibid., p. 279.
4) S. Schilder, l.c. , 147 ff .
5) Paul Gaffarel: L'histoire de l'expansion coloniale de la France depuis 1870 jusqu'en 1915; avant-propos.
6) B. von König: "Le développement commercial, économique et financier des colonies allemandes," in Revue économique internationale , 1907, Vol. 4, p. 130.
7) M. N. Pokrovsky, "Russia's Foreign Policy at the End of the Nineteenth Century," in his History of Russia in the Nineteenth Century.
8) The table was compiled by Comrade V. Ilyin [V. I. Lenin] and is quoted from one of his recent works. [ Imperialism As the Final Stage of Capitalism.
9) This is why, beginning from 1871, all international conflicts are caused by colonial policy. See loaquin Fernández Prida: Historia de los conflictos internationales del siglo XIX, Barcelona, 1901, p. 118 ff . That the expansion policy is directed in the first place towards the free territories is explained by the tendency of the bourgeoisie to follow the line of least resistance.
Contents | Chapter 4 | Chapter 6
Bukharin Archive
World Market for Raw Materials, and Change in the Conditions of Purchasing Materials
N.I. Bukharin: Imperialism and World Economy
Chapter 6: World Market for Raw Materials, and Change in the Conditions of Purchasing Materials
1. DISPROPORTION BETWEEN PARTS OF SOCIAL PRODUCTION. 2. MONOPOLY OWNERSHIP OF LAND, AND GROWTH OF DISPROPORTION BETWEEN INDUSTRY AND AGRICULTURE. 3. DEARTH OF RAW MATERIALS, AND CONTRACTION OF THE MARKET FOR RAW MATERIALS. 4. SHARPENING OF COMPETITION IN THE WORLD MARKET FOR RAW MATERIALS, AND CAPITALIST EXPANSION.
We have seen in the last chapter how recent developments in capitalism, making it more and more difficult to realise commodity values, force the ruling classes of the various "national" groups to embrace the policy of expansion. The reproduction process of capital is not limited, however, to the phase of sale alone. In the reproduction formula M-C...P...C'-M' only the latter part expresses the realisation of the price of the product (C'-M'). As a rule, only the difficulties inherent in the process C'-M', i.e. , in the process of sale, are stressed. The race for sales markets, and the industrial crises in particular, have induced the economists to analyse the difficulties met by capital when passing through the phase C'-M'. Difficulties, however, may arise also in the first phase, namely, when money is exchanged for means of production (M-C). It is a fact that the recent development of capitalist relations creates ever growing difficulties also in this sphere of the reproduction of social capital.
It is well known that the operation M-C consists of two parts: M-L and M-MP, where L signifies labour power and MP signifies means of production, so that in its developed form the formula reads M-C(L-MP). We have to examine each part of the formula separately.
In so far as the growth of productive forces has called forth changes in the structure of society and in the interrelation of class forces, it has expressed itself, among other things, in the fact that social antagonisms become exceedingly sharp, that the organised forces of class opponents face each other squarely. The state of apparent equilibrium here implies an extraordinary pressure of social forces upon one another. The tendency towards lowering the rate of profit calls forth the tendency to intensify labour on the one hand, to seek for cheap hands and a long labour day on the other. The latter, too, is achieved in the sphere of colonial policy. 1)
The other side of the issue, however, is of still greater importance.
We have in mind the disproportion between the development of industry and the development of agriculture as a source of raw material for the manufacturing industry. The latter requires greater and greater volumes of raw materials, namely wood (paper industry, building trades, cabinet making, railroad construction, etc.), animal products (hides, wool, bristles, horsehair, furs, bones, intestines, animal fats of all sorts, meat as material for the manufacturing of foods, etc.), raw materials for the textile industry (cotton, flax, hemp, etc.), finally such commodities as rubber, which plays a colossal part in all phases of industrial life, etc. The development of agriculture, however, does not keep pace with the impetuous development of industry, hence, as a fundamental fact, the high prices which have become an international phenomenon of prime importance, particularly in the recent period of capitalist development, when the industrial process has become so rapid that even the production of agriculture on the other side of the ocean could not keep pace any longer with the demand of the foremost capitalist countries for agricultural products, and the fall of world prices was followed by their rapid rise. The table below gives some idea as to the rise of prices of different commodities.
Within one decade (1903-1913) the jute price rose 128 per cent, that of cotton 13 per cent, that of cow hides 55 per cent, of calf hides 25 per cent, of bacon 31 per cent. 2)
Price in Rubles per Pood
Years Raw Jute on London Market Raw Cotton Salted Hides Russian Calf Hides American Bacon
HAMBURG MARKET
1903 1.77 9.12 6.11 19.62 6.62
1904 1.76 9.57 6.49 20.93 5.57
1905 2.42 7.72 6.93 28.64 5.79
1906 3.04 8.96 7.90 28.82 6.31
1907 2.51 9.87 7.96 27.90 7.07
1908 1.88 8.47 6.52 28.65 7.01
1909 1.83 9.46 7.22 25.38 8.97
1910 1.98 11.72 8.35 27.33 9.52
1911 2.62 10.51 8.40 26.54 7.04
1912 2.86 9.65 8.57 25.50 8.17
1913 3.93 10.35 9.47 24.60 8.66 3)
It is true that under all circumstances, and even in a socialised society, the development of the productive forces would tend towards the production of means of production. (We have seen that in capitalist society this process assumes the form of a higher organic composition of capital.) But under normal conditions this would not mean a disproportion in the distribution of the productive forces of society. On the contrary, the course of development would be smooth and harmonious, the "demand" for raw materials growing as rapidly as their "supply." What matters here is not the relative growth of industry in general, but the disproportion in the growth of its various parts. On the other hand, this course of development must not be looked upon as the expression of an "absolute" and "natural" law, which hampers the development of agricultural products in the manner pictured by Malthus and by his numerous avowed and secret followers. The main obstacle here lies in a special social category - the monopoly of land ownership.
The mere legal property in land [says Marx in his chapter on absolute ground-rent] does not create any ground-rent for the landlord. But it gives him the power to withdraw his land from exploitation until the economic conditions permit him to utilise it in such a way that it will yield him a surplus whenever the land is used either for agriculture proper or for other productive purposes, such as buildings, etc. He cannot increase or decrease the absolute quantity of its field of employment, but he can do so with its marketable quantity. For this reason, as Fourier has already remarked, a characteristic fact in all civilised countries is that a comparatively considerable portion of the land always remains uncultivated. 4)
Private property in land is then the barrier which does not permit any new investment of capital upon hitherto uncultivated or unrented land without levying a tax, in other words, without demanding a rent, although the land to be taken under new cultivation may belong to a class which does not produce any differential rent, [ i.e., rent obtained in consequence of the difference in the quality of the pieces of land, etc. - N.B. ] and which, were it not for the intervention of private property in land, might have been cultivated at a small increase in the market price, so that the regulating market price would have netted to the cultivator of this worst soil nothing but his price of production [ i.e., production cost plus average profit - N.B. ] 5)
The difference between agriculture and manufacturing is this, that while the rise of prices for the products of the manufacturing industry ordinarily entails a shrinking of the demand, so that the demand curve changes rapidly in accordance with the fluctuation of prices, the demand in the sphere of distribution of agricultural products remains comparatively more stable. (One must not forget that the production of raw materials for the manufacturing industry is in a great number of cases a by-product of the production of foodstuffs, such as the production of hides, of intestines, partly of wool, etc., being connected with the meat packing industry.) This is why competition plays a substantially smaller part in agriculture, notwithstanding the fact that monopoly organisations in the strict sense of the word are very little developed there. The laws of mass production, of an accelerated accumulation of capital, etc., apply to agriculture much less than to industry.
Thus to the disproportion between the branches of production of capitalist economy in general, as emanating from the anarchical economic structure of capitalism and continuing to exist despite the processes of cartelisation, trustification, etc., there is added the specific and ever growing disproportion between industry and agriculture. It is not surprising that this latter disproportion has become most pronounced in recent times. We have noted above the intensive growth of productive forces in the last decade. The trans-oceanic countries, in the first place the United States, have developed their own industry, and consequently their own demand for an ever growing amount of agricultural products. The same took place in other agrarian countries. In Austria-Hungary, for instance, the import of breadstuffs, etc., outgrew their export in a very short time. The general rise of the productive forces of world capitalism in the last decade has so shifted and changed the interrelation between industrial and agricultural production that here, too, quantitative changes have reached a point beyond which qualitative changes begin. This is why the epoch of dearth, of a general rise in the prices of agricultural products everywhere, is a phenomenon of the most recent phase of capitalism The rise in the prices of raw materials in turn reveals itself directly in the rate of profit, for, other conditions being equal, the rate of profit rises and falls in inverse ratio to the fluctuations in the prices of raw material. Hence a growing tendency on the part of the capitalists of the individual "national economies" to widen their markets for raw materials. The same process, however, which caused the sales markets to shrink immensely, affected in like manner the markets for raw materials, since the markets for raw materials have been, and are, mainly the same countries that serve as a "foreign" market for the sale of manufactured goods, i.e. , the countries of a lower development, including the colonies. The interests of the capitalists of the various great powers clash here as strongly as in the competition in the sphere of sales. There is nothing surprising in this since the process of the reproduction of social capital presupposes the importance not only of those changes that may take place in the last phase of the circulation chain, M-C...P...C'-M', i.e., in the phase of sale, but also of those that may take place in the phase M-L, i.e., in the phase of purchasing means of production. A capitalist "producer" is not only a vendor but also a buyer. He is not a vendor and a buyer pure and simple, but a capitalist vendor and a capitalist buyer; the acts of buying and selling are included here in the formula of capital circulation. They are parts of that formula. Hence it is perfectly obvious that Franz Oppenheimer's theory concerning the "peaceful character" of the buyers' competition and the hostile relations between vendors is entirely artificial. 6) He takes as a basis for his argument the thesis that the vendor ordinarily brings into the market only one commodity, and that his fate is connected with that commodity alone, i.e., with its price, whereas, says Oppenheimer, "the buyer is interested in a great variety of goods and their prices, and his interests depend comparatively little upon each one of those commodities since the price of one commodity may rise while the price of the other falls," etc. Oppenheimer fails to realise the most essential point, namely, that a present-day buyer is largely a capitalist buyer. Personal consumption is relegated to the rear compared with productive consumption on the basis of a widening reproduction. For production purposes, however, a mass purchase of a comparatively small number of commodities is required. As a rule, large masses of staple goods are being purchased, and one commodity often plays a highly important part. (Compare the importance of cotton for the textile industry.) 7)
Thus there are no reasons why we should consider the struggle for raw material less acute, as Oppenheimer would wish us to do. The immense growth of competition in this field is a fact which takes on still greater significance due to the tendency of annexing territories containing deposits of coal, iron ore, copper ore, oil deposits, etc. Branches of industry that play an enormous rôle and that depend on natural conditions, are easily monopolised, and once they have fallen into the hands of certain "national" groups, they are lost for the others. Of course, this applies also to agricultural production in so far as there appears on the arena a consolidated "national" group which has at its disposal the means of "occupation." England's policy in Egypt, the transformation of all of Egypt into a gigantic cotton plantation furnishing raw material for the English textile industry, may serve as a striking illustration.
It follows that the recent phase of capitalism sharpens the conflicts also in this sphere. The faster the tempo of capitalist development, the stronger the process of industrialisation of the economic life and urbanisation of the country, the more disturbed is the equilibrium between industry and agriculture, the stronger is the competition between industrially developed countries for the possession of backward countries, the more unavoidable becomes an open conflict between them.
Here, too, capitalist expansion is a "way out" of contradictions that leads with impeccable logic to the decisive moment of imperialist policy - war .
We have so far analysed the changes that have taken place within the conditions of the world circulation of commodities and which have extraordinarily sharpened the competition between "national" capitalisms, and consequently also their aggressive policy. However, the changes that characterise our epoch are not confined to these spheres alone. The development of the productive forces of world capitalism has brought to the fore other forms of international economic relations. We have in mind the international movement of capital values, which we shall presently analyse.
1) We shall not dwell here on the methods of exploitation with which this policy has besmirched itself. We only call attention to the fact that it is not all in the "past," that, to a large degree, it is also in the present.
2) On the relation between industry and agriculture as expressed in high prices, see a small but excellent pamphlet by Otto Bauer, Die Teuerung.
3) List of Prices in Principal Russian and Foreign Markets for 1913 , published by the Ministry of Commerce and Industry, Petrograd, 1914.
4) Capital, Vol. III, pp. 878-879.
5) Ibid., pp. 884-885.
6) See his reasoning on the causes of the war in Die Neue Rundschau, August, 1915 (Franz Oppenheimer: "Die Wurzel des Krieges"). His genera: view concerning the course of social development, and his "positive solution of the problem," which, in our opinion, do not go far beyond the views of Henry George and the bourgeois "land reformists," are expounded in his "critical" work entitled, Die Soziale Frage und der Sozialismus, Jena, 1912. No one but Mr. P. Maslov is under the strong influence of this economist.
7) Even the "producers" in concrete produce more than one commodity, not to speak of vendors in general. Department stores are a case in point. By this we do not mean to deny the importance of specialisation. We only wish to rehabilitate the "besmirched reputation" of the buyers.
Contents | Chapter 5 | Chapter 7
Bukharin Archive
World Movement of Capital, and Change in the Economic Forms of International Connections
N.I. Bukharin: Imperialism and World Economy
Chapter 7: World Movement of Capital, and Change in the Economic Forms of International Connections
1. OVERPRODUCTION OF CAPITAL AND ITS GROWTH. 2. MOVING FORCES OF CAPITAL EXPORT. 3. CARTELS AND CAPITAL EXPORT. 4. CAPITAL EXPORT AND LOANS. 5. CAPITAL EXPORT AND COMMERCIAL TREATIES. 6. CAPITAL EXPORT AND COMMODITY EXPORT. 7. SHARPENING OF COMPETITION FOR CAPITAL INVESTMENT SPHERES; CAPITALIST EXPANSION.
The international movement of capital may be looked upon from the point of view of the country that exports, or from the point of view of the country that imports capital.
The export of capital from a country presupposes an overproduction of capital in that country, an overaccumulation of capital. The overproduction would be absolute were the increment of capital to yield nothing from the capitalist point of view, namely, if capital, C, having increased to C+ΔC, were to yield as much profit as it would without the increment ΔC. 1) For the export of capital, however, it is not necessary that overproduction should have reached that limit. "If capital is sent to foreign countries, it is not done because there is absolutely no employment to be had for it at home. It is done because it can be employed at a higher rate of profit in a foreign country." 2) It is therefore easy to understand why we observe capital export almost throughout the history of the development of capitalism. However, it is only in the last decades that capital export has acquired an extraordinary significance, the like of which it never had before. The specific weight of this form of international economic intercourse has so increased, that to a certain degree we may even speak of a new type of economic interrelationship between countries.
Two sets of causes have been and are operating here. In the first place, the accumulation of capital proceeds with an unusually rapid tempo, due to large-scale capitalist production accompanied by incessant technical progress which makes gigantic strides and increases the productive power of labour, and to the unusual increase in the means of transportation and the perfection of means of circulation in general, which also hastens the turn-over of capital. The volumes of capital that seek employment have reached unheard of dimensions. On the other hand, the cartels and trusts, as the modern organisation of capital, tend to put certain limits to the employment of capital by fixing the volume of production. As to the non-trustified sections of industry, it becomes ever more unprofitable to invest capital in them. For monopoly organisations can overcome the tendency towards lowering the rate of profit by receiving monopoly superprofits at the expense of the non-trustified industries. Out of the surplus value created every year, one portion, that which has been created in the nontrustified branches of industry, is being transferred to the coowners of capitalist monopolies, whereas the share of the outsiders continually decreases. Thus the entire process drives capital beyond the frontiers of the country.
In the second place, high tariffs put tremendous obstacles in the way of commodities seeking to enter a foreign country. Mass production and mass overproduction make the growth of foreign trade necessary, but foreign trade meets with a barrier in the form of high tariffs. It is true that foreign trade keeps on developing, foreign sales grow, but this is taking place notwithstanding the difficulties and in spite of them. This does not mean, however, that the tariffs do not make themselves felt. Their influence is, first of all, expressed in the rate of profit. Tariff barriers, making the export of commodities very difficult, do not interfere in any way with the export of capital. Obviously, the higher the wave of duties, the larger, other conditions being equal, is the flight of capital from its home country.
The protection of industry [!] does not stimulate foreigners to establish a factory inside the tariff frontiers. Only when the foreign manufacturer and importer has lost part or all of his sales, does a moment arrive when he resorts to the establishment of factories in foreign countries-an undertaking always connected with great expense and risks. Prohibitive tariffs bringing about such consequences are contained in the McKinley and Dingley Bills of the U. S. (1890 and 1897); in the Russian legislation of 1877, 1881, 1885, and 1891; also in the French laws of 1881 and 1892. 3)
Tariff duties influence capital export also in another way. They themselves become an attraction for a capitalist. In so far as capital has been imported and begins to function in a "foreign" country as capital, it receives as much "protection" from the tariff as the capital of native businessmen. 4) This in turn causes a tremendous increase in capital export.
Capital export, however, must not be taken per se , without any connection with other highly important economic and political phenomena accompanying it. Let us glance at a few of the most significant of those phenomena.
In case of state or municipal loans, the creditor country receives more than interest on the sums advanced. The transaction is usually accompanied by a number of stipulations, in the first place that which imposes upon the borrowing country the duty to place orders with the creditor country (purchase of arms, ammunition, dreadnaughts, railroad equipment, etc.). and the duty to grant concessions for the construction of railways, tramways, telegraph and telephone lines, harbours, exploitation of mines, timberlands, etc. Such transactions are either included in the loan contract as one of its conditions, or they are an inevitable consequence of the entire "course of events." As an example we quote here a description of one of the concessions granted by the Persian government to the (Russian) Discount and Loan Bank of Persia for the construction of the railway line Julfa-Tabriz (1913):
The line gage is Russian. The time of concession is 75 years. The Persian government has the option of redeeming the railroad after the expiration of 35 years; in this case it pays back all the capital that has been spent plus 5 per cent interest, provided the concession has yielded so much. The concession grants the bank the right to exploit coal and oil deposits within 6o versts on either side of the railroad, and also to construct branch lines leading to the mines. The bank also obtains the preference right to construct the railway line Tabriz-Kazoin, and the exclusive right to construct a turnpike between the same points within eight years, also the right to exploit coal and oil deposits within 6o versts on either side of the road. After deducting from the profits of the railroad in favour of the concessionaire 7 per cent on all capital spent on its construction, the remaining net income is divided equally between the concessionaire and the Persian government. As to the oil and coal mines, the concessionaire pays to the Persian government 5 per cent of the net profits obtained from them. All the concessionaire's enterprises are free of taxes and other duties for all times. 5)
Among the "measures" intended to restrict foreign capital we find the right of the governmental power to prohibit the quotation of foreign loans and securities in general. Thus by a special law dated February 6, 1880, the French Ministry of Finance was empowered to prohibit the traffic in foreign securities, also to refuse foreign loans to be quoted in the French stock exchanges (in 1909 the French government refused to grant a loan to Argentina because in 1908 the latter had placed an order with Krupp and not with Schneider in Creuzot; in 1909, the same government refused to grant a loan to Bulgaria for lack of sufficient guarantees-the loan was secured by an Austro-German bank syndicate; for four decades German securities were not allowed to be quoted in France; in September, 1910, a loan was refused to Hungary; a loan was granted Serbia under the condition of placing orders with Schneider; after the Revolution, the Russian Government ordered cruisers to be constructed in France in return for loans, etc.). 6)
Aside from orders and concessions, definite advantages in regard to trade treaties may be secured together with the loan contract. (See, for instance, the Russo-French trade treaty of September 16-29, 1905, which was prolonged to 1917; the treaty of December 2, 1908, between Sweden and France; the treaty of 1908 between Sweden and Denmark; the tariff treaty of August 19, 1911, between France and Japan; compare also the refusal of France to allow the shares of the United States Steel Corporation to be quoted on the Paris exchange in retaliation for duties imposed on wine, silk, and automobiles by the Payne Tariff of America in 1909. 7)
When capital is exported by private persons or by industrial and banking companies, this again increases the export of commodities from the motherland, for the enterprises thus created abroad represent a certain demand by themselves, and besides, they widen by their very activities the market that is mostly dependent upon them. One must bear in mind that "foreign" enterprises are, as we have seen in the first section, financed by the largest banks or bank trusts and are possessed of a, colossal economic power. 8) Here is one example. Onethird of the land in the German colony of Cameroon is private property, but a very considerable part of this land belongs to two companies only: the South Cameroon Company holds 7,700,000 hectares, the Southwestern Cameroon Company, 8,800,000 hectares, an area six times the size of the kingdom of Saxony (1,500,000 hectares) and larger than Bavaria (7,600,000 hectares). 9) Wherever the capitalists do not possess territory, they possess other forms of financial power. In constructing the Bagdad railroad, the Deutsche Bank not only uses German material in Turkey, but it also creates a whole network of market relations, making it easy for German goods to penetrate Turkey. Thus capital export creates favourable conditions also for the industry of its home country.
Capital export unusually sharpens the relations between the great powers. Already the struggle for opportunities to invest capital, i.e. , the struggle for concessions, etc., is always reinforced by military pressure. A government or a "country" subjected to the manipulations of the financiers of the great powers ordinarily yields to that party which appears to be the strongest militarily. When some pacifists (particularly their English brand) try to influence the ruling classes by logical reasons, when they try to persuade them to disarm on the ground that commodities are supposed to find a market independently of the number of dreadnaughts, they will be cruelly disappointed. For the "peaceful" policies that were pursued before the war, and will be pursued after it, were always and everywhere reinforced by the threats of military power. To use a correct expression of the Englishman Brailsford, "the continuous war of steel and gold never ceases for a minute even in peace time." More graphically is this atmosphere of obdurate competition described by an eminent theoretician of German imperialism, Sartorius:
The growing industrialisation of the world is a fact to be reckoned with by every policy of world economy [ jede Weltwirtschaftspolitik ]. ...It is given to nobody to stop the course of development, and if a state would prohibit its subjects from establishing enterprises in other countries, this would only bring advantages to the businessmen of a third state. It is therefore best of all to have your finger in the pie in due time [ die Hand rechtzeitig im Spiele haben ].... The economic world does not stand still. One change precipitates another. There is always an opportunity for a strong nation to mix in. Here, too, the slogan " Carpe diem " is to be applied. 10)
If the pressure of military power yields concessions and various privileges, the further functioning of capital abroad also demands specific "protection." Formerly the centre of gravity lay in commodity export, whereby the exporters risked only their goods, i.e., their circulating capital. Now the situation is totally different. What we have in a "foreign" country are large sums of money, particularly of fixed capital, invested in gigantic constructions: railroads stretching over thousands of miles, very costly electric plants, large plantations, etc., etc. The capitalists of the exporting country are materially interested in "guarding" their wealth. They are therefore ready to go the limit in order that they may retain the freedom of further accumulation. 11)
Where the exploited country is weak also militarily, "peaceful penetration" of capital very quickly turns into "peaceful occupation" or division, or else it entails an armed struggle between countries competing for capital investment spheres. The fate of Turkey in the light of Franco-German competition is very typical in this respect. We wish to quote, in illustration, the writings of one French and one German imperialist published long before the war. "The Turkish Empire has been overrun by German hordes" ( hordes germaniques ) "of traders and salesmen," says the Frenchman.
Thus the network of German banks gradually spreads over the entire Ottoman Empire, supporting industry, seizing transport facilities, competing with foreign financial institutions...in brief, those banks, with powerful political support [ italics ours - N.B. ] strive financially to establish German influence over the entire Levant. 12)
Thus a French bourgeois expresses indignation over the "German hordes." But a German bourgeois is indignant in the very same way:
The French are systematically striving to make Turkey their slave debtor; up to the present they have advanced her two billion two hundred million francs. Of this sum, one-half billion was invested in railroads alone, France having constructed more railroads than any other nation. The most important Turkish harbours, like Constantinople, Salonika, Smyrna, Beirut, are in French hands. The lighthouses along the Turkish coast are in French hands. Last but not least, the most important bank of Turkey, the Ottoman Bank, operates in Constantinople entirely under French influence. Who then can escape the political consequences of such a powerful pressure of capital! French diplomacy very intensively utilises its privileged position in Turkey, particularly in recent times! 13)
Obviously, capital export in its present volume and importance is caused by the peculiarities of economic development in recent years. Looked upon from the point of view of the spreading of the organisational forms of modern capital, capital export is nothing but a seizure and a monopolisation of new spheres of capital investment by the monopoly enterprises of a great nation or-taking the process as a whole-by the organised "national" industry, by "national" finance capital. Capital export is the most convenient method for the economic policy of finance groups; it subjugates new territories with the greatest ease. This is why the sharpening of competition between various states is most salient here. The internationalisation of economic life here, too, makes it necessary to settle controversial questions by fire and sword.
1) Capital, Vol. III, p. 295.
2) Ibid. , p. 300.
3) Sartorius von Waltershausen, l.c. , p. 179.
4) Ibid. , p. 180.
5) M. P. Pavlovich: The Great Railway and Maritime Lines of the Future, St. Petersburg, 1913, p. 143.
6) S. Schilder, l.c. , p. 343 ff .
7) Ibid. , p. 353
8) Pavlovich cites a number of examples of how the banks act in the realm of railway construction; they actually allow entire countries to be swallowed by capitalist sharks.
9) Compare with a highly curious book entitled, Deutsche Colonialpolitik, 2nd, part, Staatsstreich oder Reformen. The author hides under the pseudonym Ein Ausland-Deutscher, Zurich, 1905, p. 1318.
10) Sartorius von Waltershausen, l.c. , pp. 190-191.
11) "Capital is said by a Quarterly Reviewer to fly turbulence and strife, and to be timid, which is very true; but this is very incompletely stating the question. Capital eschews no profit, or very small profit, just as nature was formerly said to abhor a vacuum. With adequate profit, capital is very bold. A certain 10 per cent will ensure its employment anywhere; 20 per cent certain will produce eagerness; 50 per cent, positive audacity; zoo per cent will make it ready to trample on all human law; 300 per cent, and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged." P. J. Dunning, quoted by Marx, Capital , Vol. I, note to p. 843.
12) Dubief: "Le chemin de fer de Bagdad," in Revue économique internationale , 1912, Vol. 2, p. 7 ff .
13) Deutsche Kolonialreform , pp. 1396-7397. One must not forget that the book was written in 1905. Since then the interrelation of forces, and the map of the world, haw undergone material change.
Contents | Chapter 6 | Chapter 8
Bukharin Archive
World Economy and the "National" State
N.I. Bukharin: Imperialism and World Economy
Chapter 8: World Economy and the "National" State
1. REPRODUCTION OF WORLD CAPITAL AND THE ROOTS OF CAPITALIST EXPANSION. 2. OVERPRODUCTION OF INDUSTRIAL GOODS, UNDERPRODUCTION OF AGRICULTURAL PRODUCTS, AND OVERPRODUCTION OF CAPITAL AS THREE FACETS OF THE SAME PHENOMENON. 3. CONFLICT BETWEEN WORLD ECONOMY AND THE LIMITATIONS OF THE "NATIONAL" STATE. 4. IMPERIALISM AS THE POLICY OF FINANCE CAPITAL. 5. IDEOLOGY OF IMPERIALISM.
From the point of view of the ruling circles of society, frictions and conflicts between "national" groups of the bourgeoisie, inevitably arising inside of present-day society, lead in their further development to war as the only solution of the problem. We have seen that those frictions and conflicts are caused by the changes that have taken place in the conditions of reproducing world capital. Capitalist society, built on a number of antagonistic elements, can maintain a relative equilibrium only at the price of painful crises; the adaptation of the various parts of the social organism to each other and to the whole can be achieved only with a colossal waste of energy, under tremendous " faux frais " of this adaptation, which flow from the character of capitalist society as such, i.e., from a definite historical formulation of the development in general.
We have laid bare three fundamental motives for the conquest policies of modern capitalist states: increased competition in the sales markets, in the markets of raw materials, and for the spheres of capital investment. This is what the modern development of capitalism and its transformation into finance capitalism has brought about.
Those three roots of the policy of finance capitalism, however, represent in substance only three facets of the same phenomenon, namely of the conflict between the growth of productive forces on the one hand, and the "national" limits of the production organisation on the other.
Indeed, overproduction of manufactured goods is at the same time underproduction of agricultural products. Underproduction of agricultural products is in this case important for us in so far as the demand on the part of industry is excessively large, i.e., in so far as there are large volumes of manufactured goods which cannot be exchanged for agricultural products; in so far as the ratio between those two branches of production has been (and is more and more) disturbed. This is why growing industry seeks for an agrarian "economic supplement" which, within the framework of capitalism, particularly its monopoly form, i.e., finance capital, inevitably expresses itself in the form of subjugating agrarian countries by force of arms.
We have just discussed the exchange of commodities. Capital export, however, does not represent an isolated phenomenon, either. Capital export, as we have seen, is due to a certain overproduction of capital. Overproduction of capital, however, is nothing but another formulation for overproduction of commodities:
Overproduction of capital [says Marx] never signifies anything else but overproduction of means of production-means of production and necessities of life-which may serve as capital, that is, serve for the exploitation of labour at a given degree of exploitation. ...Capital consists of commodities, and therefore the overproduction of capital implies an overproduction of commodities. 1)
Conversely, when the overproduction of capital decreases, there is also a decrease in the overproduction of commodities. This is why capital export, in decreasing overproduction of capital, aids also in decreasing the overproduction of commodities. (Let us note parenthetically that if, for instance, iron beams are exported into another country to be sold there, we have commodity export pure and simple; if, however, the beam-producing firm establishes an enterprise in another country and exports its commodities to equip the enterprise, we have capital export; obviously, the criterion is whether the transactions of purchase and sale take place or not.)
But even aside from simply "relieving the congestion" by exporting capital in commodity form, there is also a further connection between capital export and the decrease in the overproduction of commodities. Otto Bauer has very well formulated this connection.
Thus [he says] the exploitation of economically backward countries by the capitalists of a European country has two series of consequences: directly, it creates new spheres of investment for capital in the colonial country, and at the same time more selling opportunities for the industry of the dominating power; indirectly, it creates new spheres for the application of capital also inside of the dominating country, and increases the sale of the products of all its industries. 2)
If we thus consider the problem in its entirety, and take thereby the objective point of view, i.e., the point of view of the adaptation of modern society to its conditions of existence, we find that there is here a growing discord between the basis of social economy which has become world-wide and the peculiar class structure of society, a structure where the ruling class (the bourgeoisie) itself is split into "national" groups with contradictory economic interests, groups which, being opposed to the world proletariat, are competing among themselves for the division of the surplus value created on a world scale. Production is of a social nature; international division of labour turns the private "national" economies into parts of a gigantic all-embracing labour process, which extends over almost the whole of humanity. Acquisition, however, assumes the character of "national" (state) acquisition where the beneficiaries are huge state companies of the bourgeoisie of finance capital. The development of productive forces moves within the narrow limits of state boundaries while it has already outgrown those limits. Under such conditions there inevitably arises a conflict, which, given the existence of capitalism, is settled through extending the state frontiers in bloody struggles, a settlement which holds the prospect of new and more grandiose conflicts.
The social representatives of this contradiction are the various groups of the bourgeoisie organised in the state, with their conflicting interests. The development of world capitalism leads, on the one hand, to an internationalisation of the economic life and, on the other, to the leveling of economic differences,-and to an infinitely greater degree, the same process of economic development intensifies the tendency to "nationalise" capitalist interests, to form narrow "national" groups armed to the teeth and ready to hurl themselves at one another any moment. It is impossible to describe the fundamental aims of present-day politics better than was done by R. Hilferding. "The policy of finance capital," he says, "pursues a threefold aim: first, the creation of the largest possible economic territory which, secondly, must be protected against foreign competition by tariff walls, and thus, thirdly, must become an area of exploitation for the national monopoly companies." 3) The increase in the economic territory opens agrarian regions to the national cartels and, consequently, markets for raw materials, increasing the sales markets and the sphere of capital investment; the tariff policy makes it possible to suppress foreign competition, to obtain surplus profit, and to put into operation the battering ram of dumping; the "system" as a whole facilitates the increase of the rate of profit for the monopoly organisations. This policy of finance capital is imperialism.
Such a policy implies violent methods, for the expansion of the state territory means war. The reverse, however, is not true; not every war or every increase in the state territory implies an imperialist policy. The determining factor is whether the war expresses the policy of finance capital, the latter term being taken in accordance with the above definition. Here, as everywhere, we find some intermediary forms, whose existence, however, by no means vitiates the main definition. This is why attempts like those made by the well-known Italian economist and sociologist, Achille Loria, are fundamentally incorrect. Loria, namely, has attempted to construct two conceptions of imperialism which, he alleges, contain "entirely heterogeneous relations" ( des rélations tout à fait hétérogènes ). Loria distinguishes 4) between "economic" imperialism ( l'impérialisme économique, ökonomischer Imperialismus ) and "commercial" or "trade" imperialism ( l'impérialisme commercial, Handelsimperialismus ). The object of the former, he says, are tropical countries, the object of the latter are countries whose conditions make them suitable also for European colonisation; the method of the former is armed force, the method of the latter, peaceful treaties ( des accords pacifiques ); the former has no shadings or grades, in the latter they range from the maximum of full assimilation or a single tariff to incomplete forms, like preference tariffs between the colonies and the mother countries, etc.
This is Loria's theory. It is quite obvious that it is made out of whole cloth. Both the "commercial" and the "economic" imperialisms are in substance the expression of the same tendencies, as we have seen above. A closed ring of tariff duties, and the raising of the latter, may not result in an armed conflict immediately; they will, however, bring about such a conflict later. It is thus obvious that we cannot contrast "peaceful treaties" with "armed forces." (Peaceful treaties between England and its colonies mean a straining of the relations between England and other countries.) Neither can we assert that "economic" imperialism is merely of a "tropical" nature. The best proof is the fate of Belgium, Galicia, and the probable fate of South America, China, Turkey, and Persia.
To sum up: the development of the productive forces of world capitalism has made gigantic strides in the last decades. The upper hand in the competitive struggle has everywhere been gained by large-scale production; it has consolidated the "magnates of capital" into an ironclad organisation, which has taken possession of the entire economic life. State power has become the domain of a financial oligarchy; the latter manages production which is tied up by the banks into one knot. This process of the organisation of production has proceeded from below; it has fortified itself within the framework of modern states, which have become an exact expression of the interests of finance capital. Every one of the capitalistically advanced "national economies" has turned into some kind of a "national" trust. This process of the organisation of the economically advanced sections of world economy, on the other hand, has been accompanied by an extraordinary sharpening of their mutual competition. The overproduction of commodities, which is connected with the growth of large enterprises; the export policy of the cartels, and the narrowing of the sales markets in connection with the colonial and tariff policy of the capitalist powers; the growing disproportion between tremendously developed industry and backward agriculture; the gigantic growth of capital export and the economic subjugation of entire regions by "national" banking combines all this has thrown into the sharpest possible relief the clash of interests between the "national" groups of capital. Those groups find their final argument in the force and power of the state organisation, first of all in its army and navy. A mighty state military power is the last trump in the struggle of the powers. The fighting force in the world market thus depends upon the power and consolidation of the "nation," upon its financial and military resources. A self-sufficient national state, and an economic unit limitlessly expending its great power until it becomes a world kingdom - a world-wide empire - such is the ideal built up by finance capital.
With a steady and clear eye does it [finance capital] view the Babylonian confusion of peoples, and above all of them it sees its own nation. The latter is real; it lives in a powerful state, which keeps on increasing its power and grandeur, and which devotes all its forces to making them greater. In this way, the interests of the individual are subjugated to the interests of the whole-a condition without which no social ideology can live; a nation and a state that are hostile to the people are tied into one whole, and the national idea, as a motive power, is subjugated to politics. The class conflicts have disappeared; they have been annihilated, absorbed as they are in serving the interests of the whole. In place of the dangerous class struggle, fraught for the owners with unknown consequences, there appear the general actions of the nation which is united by one aim-the striving for national grandeur. 5)
Thus the interests of finance capital acquire a grandiose ideological formulation; every effort is made to inculcate it into the mass of workers, for, as a German imperialist has correctly remarked from his point of view: "We must gain power not only over the legs of the soldiers, but also over their minds and hearts." 6)
1) Capital , Vol. III, pp. 300-301.
2) Otto Bauer: Die Nationalitätenfrage und die Sozialdemokratie , Vienna, 1907, p. 464.
3) Rudolf Hilferding: Finanzkapital, p. 412.
4) Achille Loria, "Les deux notions de l'impérialisme," in Revue économique internationale , 1907, Vol. 3, p. 459 ff .
5) Rudolf Hilferding, l.c. pp. 428-429
6) Die deutsche Finanz-Reform der Zukunft part III of the book Staatsstreich oder Reformen by Ein Ausland-Deutscher, Zurich, 1907, p. 203.
Contents | Chapter 7 | Chapter 9
Bukharin Archive
Imperialism as an Historic Category
N.I. Bukharin: Imperialism and World Economy