Chris Bambery




from the collection, Marxism and the Modern World, Education for Socialists No.1, March 1986.
Published by the Socialist Workers Party (Britain).
Transcribed & marked up by Einde O’Callaghan for REDS – Die Roten.

When Marx became a revolutionary socialist in the 1840s, capitalism was largely confined to Britain and the Low Countries. In 1916 amid the horrors of world war Lenin wrote Imperialism – The Highest Stage of Capitalism. In the years since Marx’s death capitalism had spread its tentacles throughout the world. It had become essentially a world economy. Britain, hitherto the “Workshop of the World”, had been outstripped by its rivals – Germany and the USA in particular – and began its long slide into decline.

In other respects too things had changed dramatically. After all, the model of capitalism Marx presented in Capital was one based on small, usually family-owned, units of production. The textile industry was key. Periodically crisis would hit, driving weaker, less efficient firms to the wall. Their rivals could restore profits by seizing wider markets and by expanding productivity at little cost as they bought up machinery from bankrupt rivals. By the time Lenin wrote Imperialism, capitalism was dominated by the massive monopolies of the “new” industries, such as steel and heavy engineering.

During the slump which hit capitalism in the 1870s and again in the 1880s the American “robber barons” – Carnegie, Rockefeller, Morgan, among others, bought up their rivals at rock bottom prices. New, massive firms such as the United States Steel Corporation achieved near-monopoly positions. dominating the market. In Germany too there was a wave of bankruptcies and mergers which led to a massive restructuring of industry. Major cartels and trusts dominated both economies. Such restructuring, the implementation of new technologies, and the dominant position of these monopolies, which enabled them to outprice their rivals, guaranteed rapid economic expansion. Between 1890 and 1907 output doubled.

British capitalism was left lagging behind, but found another way out of the crisis, courtesy of its previous position as the world’s dominant capital. For British capitalism controlled vast areas of the globe, either directly through colonisation or indirectly through trade links forged in years of prosperity. British imperial power guaranteed safe markets and new areas for investment where cheap labour and materials guaranteed good returns. In 1871 British foreign investments stood at 800 million. By 1913 this had reached a staggering 3,500 million. Unlike its rivals, Britain achieved restabilisation without massive restructuring through bankruptcy and mergers.

But the two means of escape were not counterposed. Already rival capitals were competing on an international scale. In Germany and the USA the continual increase in capital investment, in new improved means of production, began to hit profit rates. The British “solution” seemed increasingly attractive. From the 1890s onwards both powers began to follow Britain’s path. Germany set out to dominate central and Eastern Europe, seized the remaining uncolonised areas of Africa and made a bid for control over the Middle East by allying with the decaying Ottoman Empire. America went to war with Spain, seizing control of Cuba, grabbed the Philippines and achieved dominance in Latin America.

Such moves brought Germany and the US into direct conflict with Britain and other imperial powers such as France and Belgium (not to mention the emerging Japanese capitalism). Faced with this competition, Britain turned belatedly to restructuring and concentration of capital. The first decade of this century saw major mergers, particularly in banking, and the adoption of new means of production. But everywhere profits were under pressure as capital expenditure rose and even Britain’s imperial domination could not offset that.

Lenin’s Imperialism – the Highest Stage of Capitalism was written to provide an easily understood explanation of why the First World War was no accident, caused by the intrigues of rival court circles or the machinations of arms manufacturers, but how it flowed from the dynamic of capitalism. In particular Lenin set out to show how the war followed what he termed imperialism, and other Marxists termed “monopoly capitalism” or “finance capitalism”.

War had become a central feature of capitalism. Imperialist rivals could not co-exist without being periodically driven into armed conflict. Competition was on an international level, with the rival powers constantly trying to widen their spheres of influence at the expense of others. As Lenin explained: “The capitalists partition the world not out of personal malice, but because the degree of concentration which has been reached forces them to adopt this method in order to get profits ...”

The central explanation for all of this lay for Lenin with the emergence of monopoly capital and the dominance of the banks over industry (finance capital). They had reached a higher point of monopoly than industry, which was now dependent on them for new sources of investment. Finance capital needed new areas of profitable investment and had launched on a struggle to divide what today we call the Third World. Between them Britain. France, Germany and the USA dontrolled the world through the export of capital in order to exploit low cost labour and materials. As Lenin wrote, these four powers controlled “... nearly 80 percent of the world’s finance. Thus in one way or another, the whole world is more or less the debtor to and vassal of these four international banker countries.”

Lenin’s stress on the instability and conflict built into the system was in sharp contrast to the leading “Marxist” of the day, the Austro-German Karl Kautsky. Kautsky argued that the development of monopoly capitalism had opened a new era of ultra-imperialism in which these giants would unite to form a single world trust, abolishing competition. The war was therefore an aberration which was not in the interests of monopoly capital.

The Bolshevik theorist Bukharin developed a more general theory of imperialism, one which Lenin welcomed and quoted approvingly. In Bukharin’s model, industrial capital becomes increasingly entwined with the respective national states. This led to intensified competition between these state capitals on an international level. Economic competition gave way to military conflict in order to seize the resources of rival capitalists and restructure production on a still wider basis. Bukharin was now creating a model of the world economic system dominated by conflicting state monopoly capitalisms. Both he and Lenin seemed to have moved light years beyond Marx’s model in Capital. Yet what remains key to all three is the central dynamic of capitalism – the competition between capitals forcing them to accumulate, to re-invest their profits in further production. In order to expand their means of production capital had moved from driving rival firms to the wall, through the creation of monopolies and the colonisation of the world, to the emergence of military conflict between rival states as a result of economic competition between monopolies.

One other thing remains central to Lenin’s theory of imperialism: what the Hungarian Marxist Georg Lukács called the “actuality of revolution”. Lenin’s book was written with one object: to show that the only way out of imperialist slaughter was workers revolution. In contrast to Kautsky, he was out to prove that capitalism had already created the economic basis for socialism, and that the system itself was entering a “period of wars and revolution”. In the advanced countries a powerful working class faced the bourgeoisie. In the colonial world the struggle for national liberation confronted imperialism. The conflict in the colonial world powerfully aided workers in the industrially advanced countries.

The outcome of all this was not pre-determined. All the time Lenin was writing, the choice was already evident on the Western and Eastern Fronts – between socialism or barbarism, between workers’ revolution or the slaughter of the trenches. And Lenin also sounded a warning for the workers’ movement. The reformist leaders and trade union bureaucrats had backed the “war effort”, sending their members to die in their thousands. These “labour lieutenants of capital”, said Lenin, acted as a prop for imperialism – supporting their own national capitalism and holding back workers’ international struggle. “The fight against imperialism is a sham and humbug”, he wrote, “unless it is inseparably bound up with the fight against opportunism.”


Last updated on 31.3.2002