[PRWC Party Documents] Pomeroy's Portrait: Revisionist Renegade, April 22, 1972

Pomeroy's Portrait: Revisionist Renegade

Apologia for U.S. Imperialism

II. A False Balance Sheet Of U.S. Imperialism In The Philippines

Basahin sa Pilipino

Amado Guerrero

April 22, 1972

Revolutionary School of Mao Tse Tung Thought, Communist Party of the Philippines

Referring to colonies, the great Lenin unequivocally stated:

In these backward countries, profits are usually high, for capital is scare, the price of land is relatively low, wages are low, raw materials are cheap

He also said:

Of course, finance capital finds most "convenient", and is able to extract the greatest profit from such a subjections as involves the loss of the political independence of the subjected countries and peoples.

Colonial possession alone gives the monopolies complete guarantee against all contingencies in the struggle with competitors, including the contingency that the latter will defend themselves by means of a law establishing a state monopoly. The more capitalism is developed, the more strongly the shortage of raw materials is felt, the more intense the competitions and the hunt for sources of raw materials throughout the whole world, the more desperate is the struggle for the acquisition of colonies.

He also pointed out that finance capital is interested not only in the already discovered sources of raw materials but also in potential sources, because present-day technical development is extremely rapid, and land which is useless today may be improved tomorrow. This also applies to prospecting for minerals, to new methods of processing of and utilizing raw materials, etc., etc. Hence the inevitable striving of finance capital to enlarge its spheres of influence and even its actual territory.

It is utterly ridiculous to expect as did Kautsky that imperialism would rely on the "open market" for its raw materials. Certainly, it became more advantageous than during the Spanish colonial era for U.S. imperialism to hold the Philippines as its own colony and get the raw materials without having to comply with Spanish laws. The U.S. imperialists would have laughed at Kautsky's pontification that "peaceful democracy", rather than military occupation, would have opened Egypt more rapidly to British trade had it been Dewey sailed into Manila Bay.

To draw a picture of U.S. traders not getting anywhere in the Philippine colony, Pomeroy deals at length with the initial advantages of the British in the import of cotton goods, export of hemp and shipping during the ten-year period of transition (1899-1909) under the Treaty of Paris. He deliberately obscures the unquestioned commercial and investment supremacy of U.S. companies following the Payne-Aldrich Act of 1909 which instituted "free trade" between the Philippines and the United States and allowed the latter to manipulate the tariffs against foreign competitors. It is well to recall that even before the outbreak of the Spanish-American War, U.S. commercial houses had already had a considerable share of Philippine trade, especially in sugar. Yet Pomeroy makes it appear that only after the U.S. conquest of the Philippines could only the American booze dealers make money in the Philippines, not on the colonized people but on the U.S. troops themselves.

Contrary to what Lenin has shown as the self-interest of imperialism, Pomeroy pictures the Philippine colony as having been more of a "major headache" for U.S. imperialism than the object of economic plunder. He emphatically claims that the U.S. monopolist were "reluctant clients", hesitant on investing in the Philippines and failing to invest as much as had been expected of them, because of supposed difficulties. He regards the Organic Act of 1902 as consisting of "anti-monopoly restrictions" rather than as a legal instrument by which the U.S. colonial government could start to grant franchises, recognize mining claims and sell or lease land to the Yankee plunderers.

Pomeroy misrepresent a short period of initial U.S. investments (1902 and thereabouts) as representing the entire period of direct U.S. colonial rule. He considers it too discouraging as it was "expensive" for the U.S. imperialists to engage in the improvement of public works and communications. He does not consider that these were not only favorable for U.S. business and military operations in the Philippines but were also paid for by taxes exacted from the colonized people. Bondholding for provincial and municipal improvements fetched huge profits for U.S. bondholders. U.S.companies exacted huge profits from supply and engineering contracts. Yet Pomeroy arbitrarily cites the "losses" suffered by the operation of railroads in Cebu and Panay as a major cause for "diminished interests" in the Philippine colony. He does not consider that the U.S. monopolies made profits on the building of these particular railroads and he covers up the tremendously profitable U.S. takeover, expansion and operation of the Manila Railroad Company.

The counter-revolutionary idea of Pomeroy that runs through his entire book is that colonization of the Philippines merely caused economic "difficulties" instead of advantages for U.S. imperialism and that such "difficulties" always pressed on U.S. imperialism to leave the Philippines to a "stable government" of Filipino puppets. In his own peculiar way, he preaches Kautsky's ideas of "peaceful democracy" as a better method for the capitalist countries to gain economic advantage. He maliciously puts aside the irresponsible demands of the Filipino people for national independence and democracy which the U.S. imperialist and the local puppet demagogues always tried to preempt in their shady compromises on "Philippine independence".

To cover up the extent of exploitation by U.S. imperialism in the Philippines, Pomeroy turns himself into an accounting cheat and trots out a false balance sheet. He estimates that militarily costs of conquest, suppression, fortification and garrison maintenance totalled at least $500 million by the time the Tydings-McDuffie Act was passed by the U.S. Congress in 1934. He prates that this amount does not include what he calls the "incalculable" expenditure in reconquering the islands and "rehabilitating" them as a result of World War II. He argues that such military costs were not exceeded by profits in U.S. trade and investments in the Philippines.

He claims if a 20 per cent rate of profit is conceded to U.S. goods, as forecast by merchants in advance of the Payne-Aldrich Act, U.S. manufacturers and merchants earned $160 million** from the U.S.-Philippine trade during the first three decades of U.S. colonial rule. He calls it as "generous estimate" for them to have earned $200 million during the said period, even if such invisibles as insurance and freight charges were included. He bewails that Philippine exports to the United States exceeded imports of U.S. goods by nearly $400 million*** (up to 1927, $1.2 billion as against $900.1 million). He regrets that on the overall U.S. profits were "more than over-balanced by far" by the amount of duties waived on Philippine products entering the United States under the "free trade" terms of the Payne-Aldrich Act. On the basis of his inane and erratic computations, Pomeroy concludes that the U.S. imperialist incurred losses rather than profits in the U.S.-Philippine trade. Yet, he states that "to some extent", which he does not care to spell out in figures, earnings from Philippine exports went to U.S. investment interests in the islands, in the refining of raw sugar, in manufacture of coconut products and in commercial handling. He claims, however, that the greater amount represented a payment by American taxpayers to "Filipino producers" well in excess of U.S. trade profits.

Pomeroy contends that the total amount of profit remitted from all investments over the period of direct U.S. colonial rule could hardly have made up the trade gap, let alone repaid the military costs. He regards the level of U.S. investments as low, a little more than $200 million at the time of the Tydings-McDuffie Law. According to him, a considerable part of the amount was accounted for by savings and reinvestments of profits. Though Pomeroy admits that huge returns were made on orignal investments, he insists that the total amount of profits remitted did not countervail the "imbalance of military expenditures and trade".

In looking at the military costs of seizing and holding on to the Philippines, Pomeroy completely obscures the fact that such were not at all borne by the U.S. monopolies. On the other hand, the U.S. monopolies profited immediately and in a long-term way from the colonial conquest of the Philippines. The costs of U.S. military aggression were imposed on the American people as well as on the people that were the victim of aggression and colonial domination. After their conquest, the Filipino people were compelled to pay the taxes necessary to defray U.S. military expenditures and to maintain the Philippines as a colony. With regard to U.S. military expenditures incurred in World War II, it is obvious that the U.S. monopolies profited tremendously and unprecedentedly from military production and was consequently able to assume the position of No. 1 imperialist power through aggression, intervention and subversion in various countries.

It is extremely shallow and absurd for Pomeroy to assume that the U.S. traders could make profits only on U.S. goods imported into the Philippines. They handled directly a considerable part of the Philippine exports crops. It is certainly not enough to compare the declared values of imports and exports to measure the profits derived by the U.S. imperialists. And to claim that the U.S. traders had a measly 20 per cent rate of profit on imported U.S. goods is to tell an outright lie. What is most important in weighing how much the U.S. imperialist (not only the U.S. traders) profited from U.S.-Philippine trade is to consider that cheap raw materials were exchanged for U.S. finished products and were destined to be processed by U.S. industries. The U.S.imperialist and the comprador-landlords in essence exploited the Filipino toiling masses by making them produce raw materials at extremely low wage rates and by making them buy U.S. finished products at extremely high prices. As a result, the Philippines remained a narrow colonial and agrarian economy, unable to freely take the road of self-reliance and industrialization and always subject to manipulation by U.S. imperialism.

The records of the Bureau of Census and Statistics show that the book value of U.S. private investments in the Philippines before the outbreak of World War II amounted to P537 million or $268.5 million. Book value in the records of the colonial government cannot tell the whole story. But Pomeroy overdoes his role as an apologist of U.S. imperialism by calling this level of U.S. investments "low" and then leaping to the conclusion that these did not make much profit or were not enough to exceed military expenditures and "losses" in trade. We need to stress the fact that even with so little capital invested in colonies and semi-colonies tremendous profits could be made and remitted annually to U.S. stockholders. But like his U.S. imperialist masters, Pomeroy would not divulge figures regarding this. The rate of profit for U.S. subsidiaries in colonies and semi-colonies is several times higher than that in the United States and other capitalist countries. Only a very tiny part of annual earnings is reinvested and accumulated from year to year. It is superficial for one to pay attention only to the magnitude of U.S. investments in the Philippines and then consider it as inconsequential because it is so much less than U.S. investments in Western Europe or Canada. U.S. investments in other capitalist countries are huge because it takes that much to squeeze into a relatively constricted field and to have a significant say on economic and political policies of those countries. What Pomeroy belittles as "small" U.S. investments is within the Philippines big and strategic capital capable of drawing superprofits and controlling the entire country.

In this case of Meralco, for instance, its original capitalization in 1901 was only $2.0 million. Sixty years later, the majority stocks would be sold to Philippine combine for $50 million. The growth of the investments is striking enough. But what would be more striking is the tremendous amount of dividents remitted to U.S. stockholders in sixty years. Pomeroy conviniently does not divulge this. This is not even reckon with the profits made on Meralco by its mother and aunt companies on various accounts. General Electric Company did not make hay on Meralco without the U.S. Steel Corporation, the U.S. oil interests, the U.S. banks and other related U.S. businesses doing the same on this Philippine enterprise.

Reffering to the monopolies in capitalist countries, Lenin observed:

The export of capital, one of the most essential economic bases of imperialism, still more completely isolates the rentiers from production and sets the seal of parasitism on the whole country that lives by exploiting the labor of several overseas countries and colonies.

By insisting that the colonial possession of the Philippines by U.S. imperialism was "not a paying" venture, Pomeroy actually whitewash U.S. imperialism and denies its bloodsucking activities. It is our view that U.S. imperialism profited greatly from its colonial possession of the Philippines. It is to argue against historical truth and to prettify U.S. imperialism to maintain the thesis that it successfully colonized the Philippines only to suffer business losses.

Totally discounting the U.S. monopolies behind the U.S. colonial regime in the Philippines, Pomeroy goes as far as to state:

U.S. business interests, including prominent industrial circles, were unwilling to share the tax and inflationary burden arising from military and administrative costs in acquiring, maintaining and defending a colonial empire.

Though he refers to a "relative minority of overseas traders and investors" as the beneficiary of the colonial regime, he does not qualify these as the top U.S. monopolies that determine U.S. policies. It is one-sided and inane to imply that the tax and inflationary burden in imperialist ventures is shouldered solely or mainly by the "U.S. business interests, including prominent industrial circles". It is shouldered by the American people, mainly the proletariat. Besides, the Filipino people under the U.S. colonial government had to shoulder the military and administrative costs in the absence of continuously effective revolutionary resistance.

An agent of U.S. imperialism through and through, Pomeroy finds one more occasion

An agent of U.S. imperialism through and through, Pomeroy finds one more occasion to praise the political system in the Unites States when he claims that "even the more aggressive commercial and investment groups that had favored seizure of colonies had reason to doubt the practicality of colonial possessions" and were in favor of abandoning the Philippine colony because "they had to contend with the fact of the U.S. Congress having authority over affairs and laws in colonies". "Corporations and individuals desiring to exploit such areas found their activities subject to the pressures and investigations of a variety of domestic influences, reformist and protectionist", he adds. He pontificates:

Congressional prerogatives were less when it came to non-colonial areas of investment and trade; operations of a neo-colonialism were far less apt to come under scrutiny.

What Pomeroy would like others to believe is that the U.S. Congress and the colonial laws were not at all in favor of the U.S. monopolies over and above the debates that transpire from time to time in any bourgeois talking shop.

Knowing no bounds for his sinister role, Pomeroy presents the U.S. Congress as a positive channel for the Filipino people. He chatters:

The post-independence events in the Philippines following 1946--the the brutal suppression with American assistance of the Huk national liberation movement and its support, the wholesale corruption of Filipino politics, the unbridled looting of the "independent" economy, the evasion of the one-time strictly-watched land laws, the crimes committed by U.S. military base personnel, the moral decay of Philippine society arising from frustrated development would have all produced major scandals and investigations of occurring under direct American rule.

Mr. Pomeroy should be told to his face that U.S. congressional investigations over U.S. activities abroad are still frequently carried on and such are done as before not to lessen or curtail imperialist interests but to give support to them. As before, the U.S. Congress is still a chamber of the U.S. monopolies.

American Neo-Colonialism is a bourgeois reformist defense of the U.S. colonial record in the Philippines and of what Pomeroy calls "welfare state at home " and "neo-colonialism abroad", both of which he refers to as "twin supports of the contemporary imperialist framework". Rather than present the continuity and increasing virulence of the aggressive, expansionist and exploitative character of U.S. imperialism, it tries vainly to resuscitate the old fallacious claims of U.S. imperialism to "isolationism" and to "altruism" or "benevolence". While it strains to show the "anti-colonial side" of U.S. imperialism and the "economic losses" of the U.S. monopolies in maintaining a colony, it obscures the oppressed and exploited condition of the Filipino people and the revolutionary tradition and role that they have carried on against colonial domination.

The annexation of the Philippines was an essential manifestation of the U.S. imperialism. This was necessary for U.S. imperialism to satisfy its inherent cravings for superprofits and expansion, to impose its power and influence not only in the Philippines but also in China and the whole of Asia. Now as before, U.S. imperialism continues to make use of the Philippines as an important base for its aggressive, expansionist and exploitative activities. The Filipino people, however, will in the end make U.S. imperialism (including puppetry to it) a truly losing proposition in the Philippines through the revolutionary struggle for national liberation and people's democracy. Lenin laid bare the moribund and decadent character of imperialism a long time ago.

Pomeroy deliberately refuses to give full weight to the more deceptive yet more violent depredations of U.S. imperialism after World War II as an outgrowth of its earlier depredations and as a further unfolding of its unchanging aggressive and bloodsucking nature. He goes to every length to show that after the colonial conquest of the Philippines, U.S. imperialism steadily moved away from "traditional colonialism", particularly the seizure of colonies. Thus, he is at a loss when confronted with the increase of U.S. military bases and colonies (South Korea, South Vietnam, Okinawa, Taiwan and others) and with such U.S. wars of aggression as in Korea and currently in Indochina in what he prefers to call the "neo-colonial" stage of U.S. imperialism. What Lenin said of Kautsky could be said of Pomeroy:

Instead of showing the living connection between periods of imperialist peace and periods of imperialist war, Kaustky presents the workers with a lifeless abstraction in order to reconcile them to their lifeless leaders.

In looking at the contemporary period, Pomeroy cannot look beyond a "repetition" of debates within imperialist ranks. He states:

When an analysis of the contemporay period is made, it will bear a market resemblance to the period of debate over imperialist policy following the Spanish-American War. (Clashes between military and civil concepts of policy, authority and administration have also occured in a repeated pattern, the MacArthur-Truman dispute in the Korean War, the "hawk" and "dove" antagonism in the Vietnam War, and the frequent Pentagon-State Department rifts being much like echoes of the Otis-Schurman and MacArthur-Taft differences during the Philippine conquest.)

The optimism of Pomeroy is an opportunist one and it lies in placing hopes mainly on the "peace-lovers" among the U.S. imperialist policy-makers. It means falling for the more aggressive and more deceptive "Nixon doctrine" of today, for instance.

What Pomeroy construes as a "new feature" of "neo-colonialism, is nothing but what Lenin had called usury imperialism, an old method for dominating other countries, exporting surplus capital, extorting superprofits and securing materials. Inasmuch as the Philippines has become a semi-colony since 1946, its nature as a debtornation has indeed become increasingly evident. Pomeroy chooses to call usury imperialism as "non-aggressive neo-colonial technique" and arbitrary sets aside the fact that this has been made possible by the aggressive nature of U.S. imperialism and the historical imperialist domination of the Philippines. It is also certain that U.S. imperialism will never allow its practice of usury on the Philippines to stop without the victory of revolutionary armed struggle against its persistent military bases and armed puppets.

While the conclusion of Pomeroy is that U.S. imperialism will continue to put "reemphasis on indirect neo-colonial methods" and to fashion "more subtle techniques of neo-colonialism" to prolong its life without any foreseeble end, we busy ourselves with raising the ideological and political consciousness and organized strength of the Filipino people in order to deal deadly blows against U.S. imperialism and all its running dogs. In this regard, we make a criticism and repudiation of Pomeroy's American Neo-Colonialism in line with Lenin's dictrum:

"... The fight against imperialism is a sham and humbug unless it is inseparably bound up with the fight against opportunism."

Chairman Mao teaches us:

... Imperialism and all reactionaries, looked at in essence, from a long-term point of view, from a strategic point of view, must be seen for what they are--paper tigers. On this we should build our strategic thinking. On the other hand, they are also living tigers, iron tigers, real tigers which can devour people. On this we should build our tactical thinking.

Imperialism will not last long because it always does evil things. It persists in grooming and supporting reactionaries in all countries who are against the people, it has forcibly seized many colonies and semi-colonies and many military bases, and it threatens the peace with atomic war. Thus, forced by imperialism to do so, more than 90 per cent of the people of the world are rising or will rise up in struggle against it. Yet imperialism is still alive, still running amuck in Asia, Africa, and Latin America. In the West, imperialism is still oppressing the people at home. This situation must change. It is the task of the people of the whole world to put an end to the aggression and oppression perpetrated by imperialism, and chiefly by U.S. imperialism.

_____ NOTES

* Thirty years is the gap between 1916 and 1946.

** The amount should be $180 million, which is 20 per cent of $900 million.

*** The amount should be about $300 million, Repeatedly Pomeroy bungles his arithmethic.