ABSTRACT
The balance of payments position of the British Empire in the late nineteenth and early twentieth centuries was characterized by a surplus on the trade account—especially in manufacturers’ trade—and a capital account deficit. This was consistent with the theories of imperialism of the day, including those of Lenin, Hobson, and even Kalecki, who all saw export markets as the necessary supplement to domestic markets and the political control of these markets as part of the logical expansion of capitalism—its “highest stage,” as Lenin put it. Today, the U.S. is widely recognized as dominating the world economy, and yet its balance of payments structure is the reverse of Britain’s, with a large trade deficit and capital account surplus. Kalecki’s analysis (1991) is particularly relevant here, because he saw the trade surplus as the basis for expanding the profit share, through a profit multiplier. 1 Blecker (2001) notes that with this insight, Kalecki felt he had “solved the problem of imperialism”; that is, he had captured the logic of the pursuit of foreign markets in relation to the pursuit of profit.
