Lenin’s Theory of State Monopoly Capitalism

An important aspect and component of Lenin’s theory of imperialism. The formation and development of Lenin’s ideas on state monopoly capitalism can be divided into two stages: the first stage was the introduction of the concept of “state monopoly” in his book Imperialism, the Highest Stage of Capitalism, before 1917.

The second stage was from 1917 to 1920; it began with Lenin’s works The Impending Catastrophe and How to Combat It and State and Revolution, and was later discussed in his report to the Extraordinary 7th Congress of the Russian Communist Party (Bolsheviks), which was held between 6-8 March 1918. Lenin’s work “Draft Program of the R.C.P (B)” delivered to the 8th Congress, which was later made public in 1931, also included Lenin’s ideas on "state monopoly capitalism”.

In the second stage within the above works, Lenin concentrated his work to elaborate on the conditions, forms, role and essence of the emergence of state monopoly capitalism and its relationship with the socialist revolution and the transition to socialism.

On the conditions of state monopoly capitalism. For Lenin, the development of private monopoly capitalism before the World War I was the inevitable result of the development of capitalism. Lenin demonstrated the nature, function and type of the capitalist state in his work Imperialism, the Highest Stage of Capitalism in 1916 and in his State and Revolution in 1917, which laid a theoretical foundation for the formation of state monopoly capitalism theory of Lenin.

Lenin’s theory of state monopoly capitalism is a new synthesis based on the theory of monopoly capitalism and state theory under the new conditions. Lenin analysed the combination of private monopoly organizations and the role of the state.

Imperialism, the Highest Stage of Capitalism started from this point of view and discussed the essence of state monopoly capitalism. Lenin first clarified the relationship between state monopoly and private monopoly, holding that the concentration and monopoly of large industries and banks had developed to a very high degree, so it was possible that private monopoly would be replaced by state monopoly. Secondly, Lenin put forward that during the war, world capitalism not only advanced to general concentration, but also advanced from general monopoly to state monopoly capitalism in a wider range than in the past.

On the form and role of state monopoly capitalism. Lenin argued that the forms of state monopoly organizations are various, and their functions are also different. In the regulation of production, the state monopoly and the so-called “mixed enterprise” system in the field of production will be transferred to the state or monopoly organization, and the production process of private enterprises will be managed, such as compulsory production and production methods.

In terms of distribution, it includes forced delivery and acceptance of goods. The state not only directly intervenes in the field of production, but also intervenes in the economy through credit relations, thus making the central bank under the control capitalist government become the “golden head” of monopoly capitalism in the whole country. The old capitalism based on free competition has been completely destroyed by war, giving way to state monopoly capitalism. On the one hand, the adjustment of state monopoly capitalism to economic life has created militarized labor camps for the workers (and some farmers), and a paradise for handful of bankers and capitalists, on the other hand, such intervention and adjustment aim to ensure that capitalists can obtain excess higher profits before the world war.

On the nature of state monopoly capitalism. Lenin argued that state monopoly capitalism is a special form of national economy. “Capitalist ‘war' economy (i.e., economy directly or indirectly connected with war contracts) is systematic and legalised plunder.” In order to grab high monopoly profits, capitalists cover up the profits in this special transaction, which is the act of stealing the Treasury. Lenin pointed out that state monopoly capitalism is a highly socialized form of social organization, and its nature is determined by the state power and the possession of means of production. State monopoly organizations are governed by the state. Under the real revolutionary democratic republic country, led by the working class state monopoly capitalism is bound to be a step to realize socialism. Under the capitalist system, it serves the interests of landlords and capitalists, because it is not a revolutionary democratic country, but an imperialist country. If under the conditions of revolutionary democracy, the state monopoly organization serves the interests of the revolutionary democrats, it is a step to realize socialism. Lenin wrote: “State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs.”

Lenin also criticized the fallacy of “state socialism” advocated by the Second International revisionists. He pointed out that from the perspective of bourgeois reformism, state monopoly capitalism is no longer capitalism, but can be called “state socialism” or “military socialism”. The reason why reformists and revisionists say this is that trust enterprises and state monopoly organizations are planned, thus deriving their socialist nature. Lenin retorted that although the trust was a little planned, although the kings of capital had taken into account the scale of production within a country or even the world in advance, and even though they had planned to regulate production, they were still under capitalism. The implementation of state regulation cannot help the workers get rid of the status of slaves, instead it helps capitalists to grab excess profits in a more “regulated” way. The regulated and planned nature of state monopoly capitalism demonstrates that this kind of capitalism is “close to” socialism.

In the latter part of World War I, and during the October Revolution, Lenin has demonstrated the essence, form, and role of state monopoly capitalism. Important theoretical issues such as its role and its relationship with the socialist revolution emphasized the cruel exploitation and oppression of the working class and working people by state monopoly capitalism, and its transitional role in the transition from a democratic revolution to a socialist revolution. In the early 1920s, Lenin studied the issues of socialist economic construction, the state’s plan and supervision of production and distribution, and the use of state capitalism to regulate and control the development of socialist economy.