Centralization of Production

In the capitalist society, with the improvement of productive forces and the intensification of competition, the means of production, labor force and commodity production are increasingly concentrated in a small number of large enterprises, which makes their share in total social production much larger. When the concentration of production develops to a certain stage, monopoly will inevitably occur, which in turn promotes the further concentration of production.

In Capital, Marx deeply analysed the process of production concentration, and expounded how the surplus value was converted into capital, and how capital accumulated to make itself increase continuously. In order to gain a firm foothold in the competition, defeat the competitors and gain profits, capitalists must not only strengthen the exploitation of workers, but also constantly improve production technology and expand production scale. In this way, there is a concentrated trend of production. Engels expounded the inevitability of forming monopoly on the basis of production concentration by analysing the basic contradictions of capitalist society in his work Anti-Dühring.

According to the basic principles of Marxism, Lenin deeply analyzed the new situation of capitalist development at the end of 19th century and the beginning of 20th century, and further demonstrated the necessity of production concentration. Lenin first pointed out that one of the most typical characteristics of capitalism is the vigorous development of industry, and the process of concentrating production in more and more large enterprises is very rapid. In order to explain this phenomenon, in Imperialism, the Highest Stage of Capitalism, Lenin not based on individual examples and materials, but applied the economic statistics and materials of developed capitalist countries all over the world to explain the phenomenon of production concentration in the new stage of capitalism.

When production concentration develops to a certain stage, it will inevitably lead to monopoly. This is because it is easy for dozens of large companies to reach agreements with each other. In addition, it is the expansion of the scale of enterprises that causes difficulties in competition and leads to the trend of monopoly. Once entering the stage of monopoly capitalism, that is, imperialism, monopoly rule will inevitably accelerate the process of production concentration. After quoting and analyzing the statistical data of developed capitalist countries, such as Germany, the United States, Britain and so on, Lenin came to the conclusion that centralized production produces monopoly, which is the general and basic law of capitalist development at the present stage.