External Expansion of Financial Capital

Financial capital strengthens its control and domination over the whole world by means of capital export, dividing up the world economically and dividing the world politically and regionally. After the financial capital occupies the dominant position in the domestic economy and politics, it is bound to demand external expansion. Lenin said: “Capitalism has grown into a world system of colonial oppression and of the financial strangulation of the overwhelming majority of the population of the world by a handful of ‘advanced’ countries.” The external expansion of financial capital mainly includes the following contents:

Firstly, capital export. Lenin said: “Typical of the old capitalism, when free competition had undivided sway, was the export of goods. Typical of the latest stage of capitalism, when monopolies rule, is the export of capital.” Lenin discussed the necessity and possibility of capital export. As for the necessity of capital export, Lenin argued that in the period of monopoly capitalism, what monopoly capital required was not average profit, but excess profit. As a result, a large amount of excess capital has been produced, which has to go abroad to find a way out. “In a few countries capitalism has become “overripe” and capital cannot find a field for ‘profitable’ investment.” As for the possibility of capital export, Lenin pointed out that the destination of capital export included developed countries and backward countries, but at that time, it was mainly backward countries. Because there is less capital, the land price and wages are relatively low, and the raw materials are also cheap. Especially because many backward countries have joined the capitalist world system, “main railways have either been or are being built in those countries, elementary conditions for industrial development have been created, etc.” Capital export accelerates the pace of financial capital into the world and strengthens the rule of financial capital over the whole world. Lenin said: “The export of capital influences and greatly accelerates the development of capitalism in those countries to which it is exported. While, therefore, the export of capital may tend to a certain extent to arrest development in the capital-exporting countries, it can only do so by expanding and deepening the further development of capitalism throughout the world.”

Secondly, the capitalist alliance carves up the world. The monopoly organization first divided the domestic market and completely controlled its production and circulation in its own hands. The financial oligarch’s overall rule over the national economic and political life is the premise and foundation of international monopoly alliance. The desire of financial capital to pursue high profits is endless. The domestic market has been unable to meet the unlimited greed of financial oligarchs. Therefore, it is inevitable to expand abroad. The development of capitalism has already created the world market. Therefore, “as the export of capital increased, and as the foreign and colonial connections and ‘spheres of influence’ of the big monopolist combines expanded in all ways, things ‘naturally’ gravitated towards an international agreement among these combines, and towards the formation of international cartels.”

After the establishment of international monopoly alliance, the capitalist world economic system finally formed and expanded rapidly. This system is not a simple sum of the economies of capitalist countries, but a relationship and system in which financial capital divides up the world economically, exploits and dominates the people of all countries on the basis of the rule of international monopoly alliance. At this time, the domestic market has developed into the world market, and the socialization of production has developed to the internationalization of production. This is a new and much higher stage of capital and production concentration in the world.

Thirdly, the great powers divided the world territory. As a result of the division of the world in economy, it has formed a certain system in politics and territory as well as in the struggle for colonies. Lenin said: “It is beyond doubt, therefore, that capitalism’s transition to the stage of monopoly capitalism, to finance capital, is connected with the intensification of the struggle for the partition of the world.”

At the end of the 19 th century, in the process of transition from free competition capitalism to monopoly capitalism, the struggle for colonies among capitalist countries have extremely sharpened.

Occupying the territory of other countries and carrying out colonial policies existed before imperialism and even in the age of slavery. But to talk about colonies in a vague way and ignore the fundamental differences between them in social and economic forms will become empty nonsense. “The capitalist colonial policy of previous stages of capitalism is essentially different from the colonial policy of finance capital.”

First of all, the role of colonies as a source of raw materials became more important in the era of imperialism. Due to the concentration and monopoly of production, the scale of production has become larger and larger, and the demand for raw materials has increased greatly. Therefore, controlling the source of raw materials has become an important means for monopoly capital to protect itself and defeat its adversaries. Although some countries were richer in raw materials, they followed the policy of gain excess profits by seizing the raw material sources by controlling the colonies. The financial capital, not only strives for more and more raw materials, but also seeks to control the regions where there may be raw material sources.

Because of the rapid development of science and technology, today’s useless land will become useful land if new methods are found tomorrow. Therefore, “the more capitalism is developed, the more strongly the shortage of raw materials appears, the more intense will be the competition and the hunt for sources of raw materials throughout the whole world, the more desperate is the struggle for the acquisition of colonies.”

Secondly, capital export has also pushed monopolies to compete for the control of colonies. Because control over markets of colonies, it wll be easier to exclude competitors and reduce industrial investment risk.

Thirdly, the superstructure on the basis of financial capital, that is, the state system and the ideology of financial capital, also strengthened the tendency to compete for colonies. In order to transfer domestic conflicts, financial oligarchs often use the occupation of colonies to find a way out. Therefore, the modern colonial policy has not only economic reasons, but also social reasons. The policy of occupying colonies by monopoly capitalism will inevitably lead to the international policy of dividing up the world politically. Therefore, Lenin pointed out: “Typical of this epoch is not only the two main groups of countries: those owning colonies, and semi-colonies, but also the diverse forms of dependent countries which, officially, are politically independent, but in fact, are enmeshed in the net of financial and diplomatic dependence.”

Under the colonial system of financial capital, the world is divided into two categories: the suzerain that monopolizes financial capital and the vast number of colonial and semi colonial countries. Lenin argued that under the influence of the unbalanced law of capitalist economic and political development, the balance of power between monopoly financial capital is constantly changing. Therefore, the struggle to redistribute the world is inevitable.