Imperialism: The Highest Stage of Capitalism

By V. I. Lenin

During the First World War, Lenin found himself isolated, but he was not afraid to fight against the stream. He dedicated all his strength to educating and training the Bolsheviks on the basis of the genuine ideas of Marxism. His masterpiece, Imperialism: The Highest Stage of Capitalism, is an immortal monument to his work in the vital field of theory.

No book has ever explained the phenomena of modern capitalism better. Indeed, all of Lenin’s predictions concerning the concentration of capital, the dominance of the banks and finance capital, the growing antagonism between nation states and the inevitability of war arising out of the contradictions of imperialism have been shown to be true by the entire history of the last 100 years.

Using the empirical evidence and statistics at his disposal, Lenin explains that, in the stage of imperialist monopoly
capitalism, the entire economy is under the domination of the banks and finance capital. Today, over 100 years after it was first published, this domination is 100 times greater. Lenin’s text therefore stands as required reading for revolutionaries.

• Language: English
• Publisher: Wellred
• Release date: Sep 30, 2020
• ISBN: 9781005399863

V. I. Lenin

V.I. Lenin (1870-1924) was a pivotal figure in twentieth century radical politics. He was a theoretician and the leader of the Russian Bolshevik Party. He wrote widely, authoring books such as Imperialism: The Highest Stage of Capitalism (Pluto, 1996). His selected writings were collected in the volume Revolution, Democracy, Socialism (Pluto, 2008).

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Introduction to the 2014 Edition by Alan Woods

The publication of a new edition of Lenin’s Imperialism could scarcely come at a more appropriate time. No book has ever explained the phenomena of modern capitalism better than this. All of Lenin’s predictions concerning the concentration of capital, the dominance of the banks and finance capital, the growing antagonism between nation states and the inevitability of war arising out of the contradictions of imperialism have been shown to be true by the entire history of the last 100 years.

What is imperialism?

It is possible to argue that certain kinds of imperialism are to be found in the pre-capitalist period and even in the world of antiquity, such as the Roman Empire. This involved the conquest, enslavement and plunder of foreign colonies. This primitive kind of imperialism can be encountered even in the modern world (the tsarist empire was in fact an example of this). However, the phenomenon underwent a fundamental transformation under capitalism. Lenin provides a scientific definition of imperialism in the modern epoch. He writes:

If it were necessary to give the briefest possible definition of imperialism, we should have to say that imperialism is the monopoly stage of capitalism. Such a definition would include what is most important, for, on the one hand, finance capital is the bank capital of a few very big monopolist banks, merged with the capital of the monopolist associations of industrialists; and, on the other hand, the division of the world is the transition from a colonial policy which has extended without hindrance to territories unseized by any capitalist power, to a colonial policy of monopolist possession of the territory of the world, which has been completely divided up. (Lenin’s Collected Works,[1] vol. 22, p. 266.)

Lenin explains the principal stages in the history of monopolies as follows:

(1) 1860-70, the highest stage, the apex of development of free competition; monopoly is in the barely discernible, embryonic stage. (2) After the crisis of 1873, a lengthy period of development of cartels; but they are still the exception. They are not yet durable. They are still a transitory phenomenon. (3) The boom at the end of the nineteenth century and the crisis of 1900-03. Cartels become one of the foundations of the whole of economic life. Capitalism has been transformed into imperialism. (LCW, vol. 22, p. 202.)

Finally, he arrives at the following definition of the most basic features of imperialism in the modern epoch:

(1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with industrial capital, and the creation, on the basis of this ‘finance capital’, of a financial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation of international monopolist capitalist associations which share the world among themselves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed. (LCW, vol. 22, pp. 266-7.)

Concentration of Capital

Already in the pages of The Communist Manifesto, Marx and Engels explained that free competition inevitably gives rise to monopoly and the concentration of capital in a few giant enterprises. This brilliant prediction was made at a time when capitalism had only really developed in England, and even there no large-scale enterprises yet existed. In France the overwhelming majority of factories were small enterprises employing only a few workers well into the twentieth century.

No aspect of Marx’s economic theories has been subject to more ferocious attacks by bourgeois economists than his prediction that free enterprise inevitably ends up in monopoly capitalism. For decades economists have denied this claim, arguing that the main tendency of modern capitalism was to promote the development of small and medium enterprises (‘small is beautiful’). But the entire course of economic developments over the last 150 years proved precisely the opposite.

Although this process did not culminate during the lifetime of Marx, Lenin was in a position to analyse it in great detail, using the vast amount of statistics at his disposal. In Imperialism he outlines the process through which capitalism becomes monopoly capitalism. He provides an exhaustive list of statistics, indicating the domination of the world economy by a small number of big banks and trusts. In recent decades, this process of concentration of capital has assumed an even more intense momentum.

The Forbes Global 2000 is an annual ranking of the largest publicly listed companies in the world. Together, these 2000 companies employ eighty-seven million people, own $159 trillion in assets, and generate $38 trillion in revenues annually – or approximately fifty-one per cent of the world’s GDP. As a reflection of the globalisation of the world, and the growing influence of emerging markets, the footprint of the Global 2000 has grown. In 2004, companies came from fifty-one markets, but by 2013 this had grown to sixty-three markets.

Japan, with 251 members, was the second largest presence on the list, with mainland China (136 members) emerging as the third largest country in terms of membership. Significantly, two Chinese companies are now at the top of the Forbes Global 2000 for the first time in history. The government-controlled Industrial and Commercial Bank of China (ICBC) usurped Exxon Mobil as the world’s biggest company in 2013, while another Chinese bank, China Construction Bank, moved up eleven spots to number two.

Regionally, Asia-Pacific had the greatest number of companies listed (715 total members), followed by Europe, the Middle East & Africa-EMEA (606), the US (543) and the Americas (143). Asia-Pacific, the biggest region, led all regions in sales growth (up eight per cent) and asset growth (up fifteen per cent) as well. The US on the other hand, led in profit growth (up four per cent), earning an aggregate $876 billion in profits, and market value growth (eleven per cent), with an aggregate value of $14.8 trillion; while the EMEA generated the most sales, a combined $13.3 trillion, and held the most assets with $64 trillion.

While the ranking of companies from other countries has increased (notably China), US companies continue to dominate the list. Despite having 208 fewer members than in 2004, when the Forbes Global 2000 was first published, the US’ total of 543 companies in the 2013 list was its highest number since 2009. Thus, US imperialism remains the dominant force on the planet.

The power of finance capital

Lenin further explains that in the stage of imperialist monopoly capitalism, the entire economy is under the domination of the banks and finance capital:

The connections between the banks and industrial enterprises, with their new content, their new forms and their new organs, namely, the big banks which are organised on both a centralised and a decentralised basis, were scarcely a characteristic economic phenomenon before the nineties; in one sense, indeed, this initial date may be advanced to the year 1897, when the important mergers took place and when, for the first time, the new form of decentralised organisation was introduced to suit the industrial policy of the banks. This starting point could perhaps be placed at an even later date, for it was the crisis of 1900 that enormously accelerated and intensified the process of concentration of industry and of banking, consolidated that process, for the first time transformed the connection with industry into the actual monopoly of the big banks, and made this connection much closer and more active.

Thus, the twentieth century marks the turning point from the old capitalism to the new, from the domination of capital in general to the domination of finance capital. (LCW, vol. 22, pp. 225-6.)

How strikingly relevant these words are to the present situation! Today, over one hundred years after Lenin wrote Imperialism, the domination of the banks and finance capital is a hundred times greater. The stranglehold of the big banks and their parasitic and exploitative nature was exposed to the whole world by the crisis of 2008. The scandalous bailouts, involving trillions of dollars of tax-payers money, were handed out to the banks by governments. This outrageous subsidy of the rich by the poor is the clearest possible example of the fusion of the big corporations and banks with the state, which lies at the heart of Lenin’s definition of imperialism.

It is characteristic of capitalism in general that the ownership of capital is separated from the application of capital to production, that money capital is separated from industrial or productive capital, and that the rentier who lives entirely on income obtained from money capital, is separated from the entrepreneur and from all who are directly concerned in the management of capital. Imperialism, or the domination of finance capital, is that highest stage of capitalism in which this separation reaches vast proportions. The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy; it means that a small number of financially ‘powerful’ states stand out among all the rest. (LCW, vol. 22, pp. 238-9.)

This is what Lenin wrote in Imperialism. What is the position today? In the Forbes Global list of the 2000 largest companies, banks and other financial institutions accounted for the largest number of companies (469 members); with the next three biggest industries by membership: oil and gas (124), materials (122) and insurance (109).

They say that the world is shrinking, but the banks, which are the real masters of the global economy are certainly not. The financial crisis of 2008, which began in the banking sector, has not halted the rising wealth and power of the world’s largest banks, which now have combined assets of about $25.5 trillion. Five years after being bailed out by the federal government, the US banking system is generating record profits. Last year alone JPMorgan, the country’s biggest bank, earned $24.4 billion in net income. Yet seventy-seven per cent of this net income of JPMorgan (and other banks) comes from government subsidies.

This fact completely exposes the myth of ‘free competition’ and ‘free market economics’. The big banks are closely entwined with the state and would not survive for a day without massive injections of public money. Vast amounts of money that are filched from the pockets of the taxpayers are appropriated by the bankers who use the money, not to expand production and create employment, but to enrich themselves and speculate on the stock exchange at the public expense.

In this strange Alice in Wonderland world, the poor subsidise the rich. It is a case of Robin Hood in reverse. Nothing illustrates the decadent and parasitic nature of modern capitalism more than the complete domination of finance capital. It is an unanswerable argument in favour of the expropriation of the big banks and monopolies and the reorganisation of society on the lines of a socialist planned economy.

Inequality

Just as bourgeois economists stubbornly denied the concentration of capital, so the bourgeois sociologists, for the same reason, attempted to deny the parallel process of polarisation of classes in society that Marx had predicted. In a famous passage in the first volume of Capital he wrote:

Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.

How indignantly did the bourgeois sociologists protest against these claims! How they ridiculed and mocked the idea that capitalism leads to a growing polarisation between rich and poor. They wrote volume after volume filled to bursting with a mass of statistics that attempted to prove that the working class had, in fact, disappeared, that we were ‘all middle class now’, that the free market economy does not impoverish the masses but enriches them and that it was a very good thing for the rich to grow richer because a portion of their wealth would eventually ‘trickle down’ to the poor, thus rendering poverty a thing of the past. Thus, everything would be for the best in the best of all capitalist worlds.

So much for the theories of the bourgeois economists and sociologists. But the facts tell another story and facts, as they say, are stubborn things. The recently published book Capital in the Twenty-First Century by the French economist Thomas Piketty has provoked a fierce controversy. Although the author is not a Marxist (he says he has never read Capital) and his ‘solutions’ to the problem of inequality do not go beyond the most timid Keynesian recipes, Piketty has been the target of furious attacks. His ‘crime’ was to point out that the rate of return on capital in capitalist economies tends to be higher than the growth rate, leading to a concentration of wealth and growing inequality, something that cannot be denied.

The concentration of capital signifies an immense accumulation of wealth and power in the hands of a small number of obscenely rich individuals and a constantly increasing number of people that struggle to survive on starvation or semi-starvation levels of existence. In a global population of seven billion, a mere handful (2,170 people) fall into the category of extreme wealth. With a typical net worth of £1.79 billion each, together they have a combined value of $6.55 trillion – larger than the GDP of Britain. Two-thirds of billionaires have a ‘self-made’ fortune, but a further one-fifth have inherited their money.

The charity Oxfam recently revealed that the richest eighty-five people have the same wealth as the poorest 3.5 billion – a truly shocking fact for anybody with an ounce of understanding. Thus, Marx’s predictions concerning the concentration of capital and the accumulation of wealth at one pole and an accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole has been corroborated with laboratory accuracy.

Material wealth begets power. Never in history has so much power been concentrated in so few hands. Democratic forms are turned into an