Theory of Monopoly Capitalism

Thought and theory which analyses the essence, characteristics and development trend of capitalism characterized by monopoly from the basic standpoint and viewpoint of Marxism.

Monopoly capitalism, also known as “imperialism”, is the highest and final stage of capitalism. The so-called monopoly means that a few large capitalist enterprises control the production and circulation of some industrial sectors and obtain excess monopoly profits through monopoly prices and other monopoly means by the virtue of their monopoly status. The formation of monopoly is the inevitable result of the development of free competition. Free competition causes large enterprises to defeat small enterprises and big capital to defeat small capital. Production is more and more concentrated in the hands of a few capitalists. The high concentration of production will inevitably lead to monopoly. At the same time, monopoly is also the inevitable result of the development of modern productive forces. At the end of the 19th century, with the rapid development of scientific and technological revolution, the socialization of production was strengthened day by day, which accelerated the merger of capital and the development of joint-stock companies, and promoted the formation of production concentration and monopoly. Marx and Engels first put forward the idea of monopoly. They analyzed the nationalization of capitalism and the direct intervention of capitalist state into the social and economic life and pointed out that this is the inevitable result of the development of the basic contradiction of capitalism that is between the socialization of production and the private possession of capital. Lenin inherited Marx and Engels’ thoughts on monopoly.

In his Imperialism, the Highest Stage of Capitalism, Lenin put forward and systematically expounded the theory of monopoly capitalism. Later, he made further development of this theory in the reports and resolutions of the Seventh National Congress of the Russian Social-Democratic Labor Party (Bolshevik), in his work State and Revolution and “On the Revision of the Party Programme” and in his other works, forming a systematic theory of state monopoly capitalism, which is a significant development of Marxist theory by Lenin.

The basic economic characteristics of imperialism, namely monopoly capitalism, include: (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.

With the development of private monopoly, the degree of socialization of production has increased unprecedentedly. On the other hand, the means of production and social wealth are increasingly concentrated in the hands of a few capitalists. At the same time, the disorderly competition of private monopoly has caused a series of social contradictions and crises. In this case, the monopoly capital has to rely on the state power to resolve contradictions and crises, so the monopoly capital and the state power are combined, and the bourgeois state comprehensively intervenes and regulates the social and economic life. On the one hand, the emergence of state monopoly capitalism overcomes the limitations of private monopoly capital and promotes the development of productive forces; on the other hand, the contradiction between socialized mass production and private ownership is further sharpened, thus further deepening the basic contradiction of capitalism. No matter what the form of monopoly capitalist countries is, in essence, capitalist machines, capitalist countries and ideal total capitalists. Monopoly organizations require the state to intervene in the economy directly, not for the benefit of consumers, nor to distribute some profits to the state. They are using the state as a tool to ensure that it can obtain excessive monopoly profits, so as to better serve the interests of the monopoly bourgeoisie.

After the World War II, monopoly capitalism has made a series of new developments, although many capitalist countries have carried out privatization policy since 1980s, the state power’s intervention in economy has not been weakened. Facts have proved that the Marxist theory of monopoly capitalism is a scientific and correct theory and the theoretical basis for our analysis of the development of capitalism.

☆ See Lenin’s Theory of State Monopoly Capitalism on page XXX