Imperialism, the Highest Stage of Capitalism (The Popular Outline)

This is Lenin’s important article on imperialism which was written from January to June 16 and published in Petrograd by Progress Publishers in mid-1917. The preface in French and in German was published in October 1921 in the 18th issue of the Communist International magazine. As early as 1920s, there was a Chinese translation. The Chinese translation is included in Vol. 27 of the second revised edition of Complete Works of Lenin.

The outbreak of the World War I in 1914 urgently demanded a further scientific explanation of imperialism and on the nature of the approaching war. In order to expose the compromise policy and treachery of opportunism and formulate a correct strategy for the proletarian revolutionary movement, Lenin devoted himself to the study of imperialism since 1915.

He read and delved into a large number of materials in the libraries of Bern, Zurich and other cities. He made about 50 excerpts, notes, tables, statistics, etc., from 148 books and 232 articles published in 1949 periodicals, and carefully studied 15 notebooks in total. On the one hand, Lenin studied imperialism on the basis of Marxist world view and methodology, Marx’s Capital and the whole economics. He quoted important words from the works of Marx and Engels and listed the important works of Marx and Engels as a bibliography to his book. On the other hand, while exposing various inherent contradictions and crises of imperialism, Lenin also quoted many views and materials put forward by bourgeois and petty-bourgeois scholars. He used a large amount of data on the world economy and international trade, development of science and technology and new achievements in enterprise management, especially the colonial and aggressive policies of imperialism. Lenin made a scientific analysis of these materials and made a meticulous preparations for writing his book Imperialism, the Highest Stage of Capitalism.

Before this book, many bourgeois economists and theorists of the Second International, such as Hobson, Hilferding, Kautsky, etc., all had already begun to pay attention to and study on imperialism and financial capital. Lenin conducted in-depth analysis and research on their works, scientifically evaluated and drew on the reasonable elements in them and wrote important works such as “Draft and Explanation of a Programme for the Social-Democratic Party”, “The War in China”, “Marxism and Revisionism”, “The Growth of Capitalist Wealth” and “Bourgeois Financial Magnates and Politicians”.

Lenin attached great importance to the reasonable elements of imperialism theories proposed by Hilferding, Hobson and others. According to Lenin, Hilferding put forward that the dominant form of capital in modern capitalism was financial capital. The economic essence of contemporary capitalism was that monopoly increasingly replacing free competition. Lenin analyzed the role of monopoly organizations (trusts, syndicates), changes in the role of banks, capital export and historical trend of financial capital rule. These views were all valuable theoretical analyses. However, Hilferding made mistakes on monetary theory, and his book had a tendency to reconcile Marxism with opportunism. His theory of financial capital was in fact a “circulation determinism”, which studied the emergence of financial capital from the aspect of circulation field and the credit field, instead of looking for the basis of economic culture from the fields of material production and from the aspect of development of productive forces. This obviously contradicted Marx’s theory. Lenin argued that Hobson made a valuable analysis of the economic features of imperialism and saw the nature of imperialist aggression and expansion.

Lenin argued that Kautsky’s “ultra-imperialism” theory would mean to hope that the struggle between financial capital groups of various countries would cease. This theory estimated that instead of struggles, these finance capital groups would prefer to form joint international financial capital to exploit the world together. It might temporarily create new hopes in the capitalist field. Lenin argued that this theory was only a fantasy. Under the conditions of capitalism, eliminating the incompatibility between the development of productive forces and hindering the law of capital accumulation would be impossible, and the struggles for the division of colonies and struggles for spheres of influence by different financial capital groups, cannot be eliminated.

From January to June 1916, Lenin completed the book Imperialism, the Highest Stage of Capitalism in about half a year. This book showed Lenin’s complete theory of imperialism with a preface in Russian, French, German and ten chapters. Chapter 1 to 7 revealed the main features of imperialism. Chapter 8 to 10, on the basis of the above chapters, made an analysis considering politics and exposed the monopoly, parasitic, decadent and reactionary nature of imperialism, and draw a scientific conclusion that imperialism was a dying capitalism and was the eve of the proletarian revolution.

As was written in the preface part, Lenin hoped to help the reader to understand the fundamental economic question, that of the economic essence of imperialism, for unless this is studied, it will be impossible to understand and appraise modern war and modern politics. Lenin also said that this pamphlet was written with an eye to the tsarist censorship. Hence, He was not only forced to confine himself strictly to an exclusively theoretical, specifically economic analysis of facts, but to formulate the few necessary observations on politics with extreme caution, by hints, in an allegorical language when expressing political opinions, for example, that imperialism is the eve of the socialist revolution; that social-chauvinism is the utter betrayal of socialism, complete desertion to the side of the bourgeoisie; that this split in the working-class movement is bound up with the objective conditions of imperialism, so forth.

The main text can be divided into two parts: In the first part, Lenin revealed the basic characteristics of imperialism and their mutual relations, pointing out that imperialism was the monopoly stage of capitalism. According to Lenin, imperialism has five basic characteristics.

(1) The concentration of production and capital had developed to such a high level that it created monopoly organizations that played a decisive role in the economy. Lenin followed Marx’s views on production concentration and monopoly, and analyzed the emergence, development and characteristics of monopoly. He pointed out that monopoly was the general and basic law of capitalist development at this stage. He used a large amount of data and facts to illustrate that the emergence and development of monopoly organizations could be divided into three stages: The 1860s and 1870s were the climax or the highest stage of the development of free competition, at which time monopoly organizations were only an unobvious bud; after that, the temporary phenomenon of cartels, which was still unstable, appeared. At the beginning of the 20th century, with the vigorous development of industry, the concentration of production on large enterprises grew rapidly, and capitalist free competition was eventually replaced by capitalist monopoly. Cartel, syndicate and trust in the era of imperialism were the main forms of monopoly due to centralized production. Cartel alliances became a basis for all economic life. The most important basic industrial sector in capitalist society was completely controlled by monopoly organizations. Banks became monopolies of financial capital; financial capital competed for raw material producing, capital export and “sphere of influence (colony)”. Lenin also pointed out that although monopoly arised from competition, monopolycould not eliminate competition, but was superior to competition. The coexistence of competition and monopoly produced many sharp contradictions, included the contradictions between the socialization of production and the capitalist private possession of means of production; between the monopoly bourgeoisie and the middle and petty bourgeoisie; between monopolists and the ordinary people; and between industry and agriculture, etc. Monopoly was the deepest economic foundation of imperialism and the root of various contradictions.

(2) The combination of bank and industrial monopoly capital formed financial capital. Lenin analyzed the emergence and development of financial capital and revealed the new changes and functions of banks in the stage of monopoly capitalism.

First of all, Lenin argued that the rule of “competition leads to monopoly” was also applicable to banks, which always greatly strengthen and accelerate the process of capital concentration and monopoly organizations. The dense network of large banks became nationwide. These magnate banks centralized capital and monetary income of all capitalists and small owners, they controlled the means of production and the source of raw materials in their home country and in many other countries, transformed tens of thousands of scattered economies into a unified national capitalist economy as well as into a global capitalist economy, which greatly strengthened the strength and role of monopoly groups and trusts. With the concentration of capital and the increase of bank turnovers, the role of large banking sector expanded from a purely technical and completely auxiliary business to one that controlled the entire capitalist society. The role of banks has transformed from the ordinary role of intermediaries to powerful monopolists. Through banks, monopolists could accurately learn about the economic and financial operations of various capitalists, supervise them, and take advantage of the influence of credit to finally fully control their fates. Furthermore, Lenin analyzed the role of financial capital. Since bank monopoly were formed and controlled billions of capital, it would inevitably penetrate into all aspects of social life. Financial capital dominated the economic and political life of the whole country. With the help of the “participation system”, they manipulated capital far exceeding their own capital by several times or even dozens of times. They also gained huge and increasing profits by acquiring profitable enterprises, issuing securities, bonds, handling public debt bonds, etc. They consolidate the rule of financial oligarchs, levied tribute on the whole society for monopolists, and thus combined monopoly capital with state power. Financial capital also exercised control over the world. A small number of countries with superior financial strength were in a special position different from the other countries. They formed an international monopoly alliance and started to carving up the world markets, which developed in tandem with the carving up of the world territorially. Lenin pointed out that imperialism, or the rule of financial capital, was the highest stage of capitalism.

(3) Capital export has gained special significance and upper hand. Firstly, Lenin pointed out that the characteristic of the old capitalism dominated by free competition was commodity export, and the characteristic of capitalism dominated by monopoly was the capital export.

Secondly, Lenin explained the significance of capital export from the perspective of necessity and possibility. Its inevitability lied in that as long as capitalism was still capitalism, the surplus capital would not be used to improve the living standards of the local people, but would be exported to foreign countries and backward countries to obtain more profits. The possibility was that advanced countries had a large amount of “surplus capital” to seek new investment sites, while backward countries were left with less capital, lower land prices, lower wages and cheaper raw materials. The reason why it had the possibility of capital export was that many backward countries had been involved in the circulation of world capitalism; main railway lines had been built or started to be built; and the minimum conditions for industrial development had been ensured. These all enabled capital export to gain high profits. In the end, Lenin explained the influence of capital export. If capital export causes stagnation in the development of exporting countries to a certain extent, it will certainly be compensated by expanding and deepening the further development of capitalism in the world. Of course, the aim of capital exporting countries was not to cultivate independent capitalist countries, but to gain benefits. Capital export became an important means for imperialist countries to claim various privileges and expand commodity export. It was an indisputable fact that financial capital dominated the world.

(4) A monopoly alliance of capitalist countries had already been formed to carve up the world. After controlling domestic production, the capitalist monopoly alliance would inevitably expand to the world market with capital export, growing from domestic monopoly to international monopoly. The increasing expansion of foreign ties, colonial ties and “spheres of influence” of a few of the largest monopoly alliances led to fierce competition to carve up the world market. They tried to seek temporary compromises when deadlocked. These monopoly alliances had “naturally” turned to agreements to carve up the world market and formed international cartels. It marked a new and much higher stage in the concentration of world capital and production. Of course, the formation of the international monopoly alliance did not eliminate the redistribution of the world caused by changes in the balance of power. Lenin criticized the viewpoint of Kautsky and other bourgeois scholars that “international cartels can bring hope to the peace among all nations under the capitalist system”. Lenin pointed out that the capitalist alliance’s division of the world was inevitable for the development of centralization and monopoly, and the principle of dividing the sphere of influence was based on “strength”. Therefore, we were in a special era of world colony which was closely linked to the latest stage of capitalist development, namely the financial capital. Capitalist alliance was to pursue the biggest monopoly profits, and the fight to carve up and redistribute the world was inevitable.

(5) The capitalist powers finished their carving up of the world’s territory. First of all, Lenin pointed out the fact and essence that the world territory was divided up by the big powers. Lenin argued that imperialism was capitalism that has developed to a stage when the rule of monopoly organizations and financial capital had been established; capital export had great significance; international trusts begun to carve up the world; and some of the largest capitalist countries had finished carving up all the territory of the world. The nature of capital export was colonial expansion. Financial capital also led to direct division of the world. Secondly, Lenin distinguished the colonial policy in the era of imperialism from past colonial policies. In the era of financial capital, colonies were of special significance. Colonies were the best places for monopoly capital to control the origin of raw materials, export capital and goods, ease domestic contradictions and transfer economic crises. They were the foundation on which imperialism depended for survival. The role of colony became increasing important, the fight for the colony became more intense and all of the world’s territory was divided up. Lenin pointed out that the result of such division of the world was bound to form two types of countries: colonial possessors and colonies, and their various forms of dependencies. Colonies and dependencies were politically and formally independent, but economically and diplomatically dependent on imperialist countries. Thirdly, Lenin analyzed the different attitudes of different social classes towards imperialist policies and criticized the errors of opportunist theories on imperialism represented by Kautsky.

He pointed out that Kautsky was in cahoots with the petty bourgeoisie, and his imperialism was a policy that encouraged to use the national strength of industrial capitalism to annex or conquer more agricultural regions. This view hided the reactionary nature imperialism. Lenin pointed out that what the imperialists had merged was financial capital rather than industrial capital, and that such mergers were not limited to agriculture but also industrial areas. Kautsky mistakenly separated the politics and economy of imperialism, argued that economic monopoly could coexist with non-violence and non-monopoly in politics, and financial capital groups may form international alliances to jointly exploit the world instead of fighting with each other, thus making capitalism enter the stage of super-imperialism and lead to lasting peace in the world.

Lenin refuted this argument and pointed out that capitalist monopoly was the inevitable result of free competition, and imperialism’s foreign capital expansion was the result of financial capital tyranny. Kautsky’s “ultra-imperialism” theory attempted to reconcile the contradictions between Marxism and opportunism that emerged in the European workers’ movement, which was totally incompatible with the tenets and theories of Marxism.

In the second part, Lenin scientifically predicted the historical status and development trend of imperialism and revealed the economic characteristics of imperialism and its historical trend of development. He pointed out that imperialism must be defined as precisely as possible. Imperialism was a specific historical stage of capitalism which mainly demonstrates itself in three ways:

(1) Imperialism, in terms of its economic nature, was monopoly capitalism. This determined the historical status of imperialism. One should say that imperialism was capitalism in transition. Monopoly, grown from free competition, was a transition from a capitalist socio-economic structure to a more advanced structure. Monopoly capitalism had four main features: Monopoly was the growth to a high-level concentration, forming various monopoly alliances of capitalists. Monopoly led to plunder of the most important sources of raw materials. Monopoly grew up from banks to monopolies of financial capital. Monopoly has grown up from colonial policies. When the whole world has been divided, the fight for dividing and redistributing the world would become especially fierce. In this way, monopoly capitalism would facilitate the contradictions of capitalism to an extremely sharp degree. This sharp conflict was the most powerful driving force in the transitional historical period, which started when the financial capital finally gained victory.

(2) Imperialism is parasitic or decaying capitalism. Lenin pointed out that the trend of monopoly and oligarchy replaced the trend of freedom, and a very small number of the most prosperous countries exploited more and more weak countries. As a result, imperialism became, as one must say, a parasitic or rotten capitalism. The decadence of imperialism lied in the monopoly of capitalist relations of production, which seriously hindered the development of productive forces. Capitalist production and technology have shown a trend of stagnation and decay. Due to the domination of monopoly organizations and monopoly prices, technology has largely lost the motives of competition, thus artificially hindering the development of production and technology. However, Lenin did not absolutize the stagnation caused by monopoly. He argued that this did not rule out the astonishing and rapid development of capitalism in individual industrial sectors, individual countries or individual periods. Since the inherent law of productive forces development still worked, monopoly cannot not completely exclude competition, which means development of productive forces cannot remain in completely stagnant status. Lenin revealed that the parasitism of imperialism was also manifested in the large accumulation of monetary capital in the hands of few countries, which has greatly increased the class of profiteers who earned their living by “clipping coupons”. Capital export of the exporter country, which depended on exploiting the labor of many weaker overseas and countries and colonies caused a parasitic trend in the exporter country.

Lenin also specifically pointed out that since imperialism enjoyed excess monopoly profits in dividing up the world, it was economically possible for them to buy off the upper strata of the proletariat, thus cultivating, forming and consolidating opportunism and making it even more incompatible with the general fundamental interests of the workers’ movement.

(3) Imperialism is capitalism in transition or moribund capitalism. Lenin pointed out that monopoly rule has intensified the internal contradictions and contradictions among capitalist countries and was a powerful driving force for the transition from capitalism to socialism. Due to the monopoly mechanism and monopoly prices, the oppression on the remaining residents by a few monopolists has become heavier and more unbearable. This has intensified the contradiction between the proletariat and the bourgeoisie. At the same time, monopoly led to the plundering of raw material resources in the colonies and the intensification of the division of colonial territories, thus causing the sharp contradiction between imperialism and people under colony. In addition, monopoly capital not only plundered the factors of production nationwide and around the world, but also caused the imbalance of development between various monopoly capital groups and imperialist countries, which made it possible for some monopoly capital groups and imperialist countries to develop rapidly. Conflicts of interest between each other made war between imperialist countries inevitable.

In July 1920, Lenin made important supplements in the prefaces to the French and German versions of the book. (1) War is absolutely inevitable on the basis of uneven economic development among imperialist countries. (2) War has added to the crisis of a world revolution which would eventually end in the victory of the proletarian revolution. (3) The proletarian party must fight against opportunism and win over the petty bourgeoisie. (4) The parasitic and decaying nature of imperialism is the basis for the division of the workers’ movement. The bourgeois workers’ aristocracy is the main pillar of the Second International and the real agent of the bourgeoisie in the workers’ movement. (5) Imperialism is the eve of the proletarian revolution.

In Imperialism, the Highest Stage of Capitalism, Lenin revealed the characteristics and essence of imperialism and pointed out the historical trend of its development on the basis of new practice and scientific analysis of monopoly capitalism. This book is an important continuation of Marx’s Capital under the new historical conditions of capitalism development. It is also an innovative scientific theory of imperialism and Lenin’s most important theoretical achievement.