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Capitalism Enters Its Imperialist Stage

p At the turn of the century capitalism attained the highest stage of its development. The capitalist system of social relations had by this time come to predominate throughout the world and various new features and phenomena started to appear in its nature and development. This did not happen overnight but was a slow, gradual process, coming to full fruition at the turn of the century.

p These new features were to be observed in economic and political developments and class relations. Many people noticed these new features in isolation; economists and sociologists described various aspects of these phenomena but were unable to grasp all their implications and draw up the laws governing the development of the new processes.

p It was Lenin, in his famous work Imperialism, the Highest Stage of Capitalism (1916), who clearly revealed the essence of imperialism and defined its historical significance. Lenin established that imperialism is not a particular policy adopted or rejected by this or that group of capitalists, but a definite, historically determined stage in the evolution of capitalism, its latest, highest and last stage.

p In the economic sphere this new phase of capitalism is distinguished by the following characteristics. First and foremost, the concentration of production and capital reaches a level where the decisive role in a country’s economy is played by monopolies. The leading monopolies—powerful trusts and concerns—which gradually take over smaller, less powerful enterprises, come to command a dominant position in their respective industries. For example, by the end of the nineteenth century the Rockefeller oil trust Standard Oil already controlled 90% of the United States’ oil production, while the United States Steel Corporation founded 533 in 1901 by Morgan and possessing assets of over a thousand million dollars had by this time gained control of approximately twothirds of the steel industry. In Germany the two giant electrical engineering firms, Siemens & Halske and AEG, after taking over their weaker rivals controlled between them about two-thirds of this industry. In France two concerns—Kiihlmann and Saint Gobain—ruled the roost in the chemical industry.

p Throughout the capitalist world monopolies were to play a decisive role in industrial development. Similar concentration was to be observed in the banking world. Here too, as a rule, four or five banks, each with their network of subsidiaries and affiliated financial businesses, held sway in a given country.

p The second distinctive feature of the imperialist stage of capitalist development was the close coalescence of bank and industrial capital—hence the emergence of finance capital and powerful financial oligarchies.

p The export of capital, which was now playing an increasingly important role as compared with the export of commodities, was yet another typical feature of imperialism: for example, by 1914, British capital exports totalled between seventy-five and a hundred thousand million francs, French sixty thousand million, and German forty-four thousand million francs. Thus these three countries alone had exported the then colossal sum of almost 200,000,000,000 francs.

p The fourth feature typical of the imperialist stage of capitalist development was the formation of international monopoly groupings and the division of the world into spheres of influence of these capitalist alliances. An example of this phenomenon was provided by the international rail cartel which established specific quotas for Britain, Germany, and Belgium. Later France, Austria, Spain and the USA were to join the cartel. In 1909 an international zinc syndicate was set up which determined the scale of production for German, Belgian, French, Spanish and British factories. A number of new international alliances emerged and agreements were drawn up with regard to the division of sales markets between some of the leading monopolies from various countries (which, however, did not necessarily exclude rivalry between them).

p Fifth and last was the completion of the territorial division of the world between the leading capitalist powers and the commencement of the struggle aimed at recarving the map.

p The first imperialist war over the redivision of the world was the Spanish-American War in 1898. In this war the comparatively young, vigorous capitalism of the United States eager for territorial expansion (by whatever possible means) was opposing Spain whose power was already on the wane and who was finding it more and more difficult to hold her extensive colonial empire together. The 534 United States soon emerged victorious from this confrontation, driving the Spaniards out of the Philippines and Cuba. The peoples of these two subject territories took up arms to defend their freedom and independence. The Filipinos and the Cubans had no more wish to live under American rule than under the Spanish. However, at that time—at the dawn of the anti-imperialist liberation struggle—the peoples of Cuba and the Philippines were not yet strong enough to defend their independence and the deployment and correlation of class forces in the international arena at that period did not as yet favour the chances of the popular masses.

p However, the US imperialists were not alone in aspiring to alter the existing colonial divisions by force of arms. German imperialism, by this time armed to the teeth, entertained similar ambitions, and likewise Japanese imperialism which, not content with suppressing the Korean people, dreamt of encroaching on Chinese territory as well. Italian imperialists, much less buoyant and powerful than their fellows but nevertheless extremely aggressive, in 1896 attempted to absorb Ethiopia.

Meanwhile the established colonial powers—Britain, France, Holland, Portugal and Spain also tightened their grip on the lands they had long held and showed no inclination to part with any of them. The aspirations of young imperialist states which had grown up after them and were eager to wrest colonial territories from the conquerors of old inevitably led to bitter strife between the two groups. In the capitalist world such a fierce clash of interests over the sharing out of colonial booty could only be settled in one way, and that was by war. The struggle for the redivision of the world and colonial possessions was inevitably to lead to an imperialist war.

Imperialism—the Last Stage of Capitalism

p Among the various features of imperialism, the most fundamental and important is the appearance of monopolies. Lenin wrote that the most apt short definition of the essential nature of imperialism would be "the monopoly stage of capitalism”. There were naturally numerous local variations to be taken into account: for example, Lenin referred to British imperialism as "colonial imperialism”, German imperialism as "Junker imperialism”, French imperialism as "usurer imperialism”, Russian imperialism as " military-feudal imperialism”. Yet despite all the differences existing between these countries, at times rather considerable, their development reflected the operation of all the general laws inherent in imperialism, as a definite stage of capitalist development.

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Once capitalism had reached this highest form of its development—the monopoly—it had reached a historical watershed. Monopoly capitalism is not only the highest stage of capitalism but also its last stage. Under imperialism not only have the objective material conditions been created for the transition to a different, socialist mode of production, but also all the basic contradictions inherent in the capitalist system have become so acute that a revolutionary solution is inevitable. It was this consideration that led Lenin to assert that imperialism was the final stage before the socialist revolution.

Parasitic Features and Decay
of the Capitalist System at the Beginning
of the Twentieth Century

p The historical inevitability of the downfall of imperialism was reflected and still manifests itself in a variety of phenomena. Even at the beginning of the twentieth century, when the capitalist system of social relations dominated the whole world, signs of its decay and decline were already to be observed. Monopoly, by its very nature, gives birth to stagnation and decay. This does not however imply that capitalism at this final stage leads immediately to stagnation of production. During the imperialist stage production even increases, and several industries expand extremely rapidly. Yet at the same time the unevenness of capitalist development comes much more clearly to the fore and various new features of capitalism such as parasitism and decay emerge.

p These features are reflected in such phenomena as the growth of non-productive strata in the ruling classes, the increasing number of rentiers—individuals living on the interest gleaned from the capital they loan out. Rentiers are in essence parasites, who carry out no useful social function and have long since ceased to do any real work; in the imperialist era they come to constitute a sizable section of society in many developed capitalist countries. Those countries which export capital and draw interest from it also assume the functions of rentiers. The sixty thousand million francs which France invested abroad in 1914 would no doubt have served to inject a powerful new lease of life into the country’s own economy. This stands out particularly clearly if we take into account how the war indemnity of five thousand million francs paid in 1871-73 to Germany gave a major boost to the latter’s economy. However the wealthy businessmen who export capital give little thought to the home economy but are only concerned with gaining maximum profits, and their transactions are gradually turning the countries where they hold sway into rentier states.

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p Another reflection of parasitism and decay in the last, imperialist stage of capitalism is the rapid, sweeping increase in the ranks of those employed in various types of unproductive work. An enormous amount of human effort is wasted through war. During the imperialist war of 1914-18 in the seven main belligerent countries more than sixty million able-bodied men were mobilised; instead of carrying out productive work they were engaged in exterminating each other. Altogether 36 states took part in this war and their total population numbered over a thousand million.

p Yet even in peace time military budgets and the arms race devour a considerable part of a country’s labour. In Germany on the eve of the First World War allocations for military purposes were two and a half times larger than those for all other purposes; in France at the same period military spending accounted for more than a third of the budget.

The decay of capitalism was also reflected in the fact that in a number of instances it started to act as a brake on technological progress. In cases where the interests of the monopolies did not demand technical innovations and improvements they made no attempt to introduce any and even deliberately obstructed them.

Imperialism and Political Reaction

p Yet these signs of parasitism, decay and decline which appeared in the capitalist system at the beginning of the twentieth century did not in the slightest imply any change in its aggressive, reactionary character. On the contrary, during the imperialist era the reactionary, aggressive features inherent in the capitalist system become even more clearly pronounced. At this period the arms race, far from slowing down, intensifies. Through their militaristic policies, open military threats and the unleashing of imperialist wars the strongest among the great imperialist powers seek, by conquering and enslaving weaker countries, to consolidate and enhance their own influence and domination. Imperialism and war go hand in hand.

Yet imperialism does not only imply aggression on foreign soil. The imperialist epoch is one of mounting reaction both in domestic and foreign policies of the various capitalist countries. Once it has reached the summit of its power and has come to constitute the ruling class of oppressors, the bourgeoisie is no longer interested in social progress. Indeed, the imperialist bourgeoisie is bitterly opposed to progress and comes to constitute a bastion of reaction and counter-revolution. The motive force behind all the activities of the imperialist bourgeoisie—the monopolists, bankers, factoryowners, traders, colonialists and all powerful men of property— 537 is the drive for maximum profits—nothing else matters. At an earlier period, the activities and creed of the bourgeoisie were directed against the Church, but in the twentieth century the imperialist bourgeoisie is working hand in glove with the Church in order to defend their common self-seeking interests. The bourgeoisie was once an enemy of the hereditary aristocracy and absolutism but now itself has come to constitute a moneyed aristocracy and is going out of its way to establish a closer relationship with what remained of the nobility, striving in every way to consolidate the state machinery which serves its interests. Less than two centuries earlier, in the age of the Enlightenment, the bourgeoisie had proclaimed the triumph of freedom and reason, championed social and personal freedom and sought support among the popular masses. By the twentieth century, however, this class had become a bastion of reaction and obscurantism, promulgating a cult of militarism and violence, great power nationalism and brutal chauvinism. Its former hero Voltaire, the champion of free thought, was now replaced by the extremely reactionary German philosopher Nietzsche (1844-1900) whose writings are permeated with cynical acclamation of brute force and all manner of antihumanist ideas.

Opposition to Imperialist Reaction

p In the imperialist era the united forces of reaction have met with opposition from the forces championing democracy and the interests of the people. In the steps of the working class, which constitutes the main enemy of the imperialist bourgeoisie, nonproletarian strata of the working population also join in the struggle. Outstanding writers at the turn of the century exposed the capitalist world in their finest works, criticising its code of morals and social conventions. Among them were such figures as Anatole France (1884-1924), Romain Holland (1866-1944), Heinrich Mann (1871-1950), Thomas Mann (1875-1955) and Jack London (1876-1916). Teachers, and other professionals, the lower and middle echelons of white-collar workers, who earlier remained aloof from the class struggle, now begin to participate in it.

The working class at this period asserts itself as the main bastion of democracy more and more forcefully. Time and time again when the proletariat together with those democratic forces which afforded it direct or indirect support came out on the offensive, the ruling classes found themselves obliged to make concessions. For instance, in Britain in face of a new wave of activity in the labour movement the Liberal government led by 538 the dexterous and intelligent Lloyd George (1863-1945) introduced a number of reforms including: an eight-hour day for miners (1908); social insurance for workers to provide against sickness and unemployment (1911); the Parliament Bill (1911) which stipulated that measures which passed the Commons three times unaltered in three separate sessions could be presented for royal assent without consent of the Lords, and that financial measures might be so presented without repeated passage a month after passing the Commons. In 1905 a law was introduced in France disestablishing the Church, and universal suffrage was introduced in Austria in 1907 (for men).

Colonialism and Colonial Policy

p Imperialism also brought in its wake intensification of colonial aggressions. Both the Great Powers and the small, yet industrially developed, capitalist countries such as Belgium and Holland went out of their way to intensify the exploitation of the subject peoples in their respective colonies. At the same time they strove to gain control of any territory which for some reason or other (usually as a result of rivalry between various claimants) had not yet been annexed. Not only those countries which had entered the colonial race at this late stage, but also the established colonial powers aspired to new conquests.

p At the beginning of the century Britain possessed the largest colonial empire. In 1900 her colonies and dependent territories had an area 109 times greater than that of the mother country, with a population 8.8 times greater. In Britain’s hands were concentrated 44.9% of the world’s colonial territories, and it was these colonies that were the source of her might and wealth. But still unsatisfied with this the British colonialists were bent on extending the bounds of the empire "wider still and wider”. Thus from 1899 to 1902 Britain waged an openly aggressive war of plunder against the two Boer Republics of Transvaal and Orange Free State, which she finally succeeded in annexing. The Boer War was one of the first imperialist wars which aroused the just indignation of progressives everywhere. In 1906 Britain seized the New Hebrides islands. Although Britain’s economic might no longer constituted the same threat to her rivals, this did not mean that she was prepared to abandon even the tiniest corner of her enormous empire. The British lion had placed its foot firmly on its prey and growled fiercely whenever anyone made an attempt to come near.

p France’s empire was the second largest both as regards territory and population, yet this consideration did not satisfy the 539 appetites of the French colonialists. During the first decade of the twentieth century, to the great displeasure of the German imperialists who made repeated threats of war in this connection, France engaged in the “penetration” of Morocco. By 1911 for all practical purposes Morocco had already been annexed and incorporated into the French colonial empire.

p The small yet economically powerful country of Belgium conquered the enormous territory of the Congo in Central Africa at the end of the nineteenth century and proceeded to submit its people to merciless exploitation.

p Apart from these undisguised acts of colonial plunder the Great Powers and economically developed capitalist countries also frequently engaged in covert forms of colonial expansion. It often proved more advantageous and convenient for the imperialists to present themselves as friends and defenders of the peoples of the economically backward countries rather than to employ open violence. Such was the course adopted for example by the powerful imperialist circles of the United States.

p On frequent occasions the dollar was to prove a more effective weapon than the bayonet for imperialist giants from the USA. In the countries of Latin America, formally recognised as independent sovereign states, American influence asserted itself mainly by means of economic infiltration. US capital soon penetrated all spheres of economic life in the Latin American countries, and succeeded in ousting most of its British rivals. The nominally independent states of Latin America were in practice to become peons of American capital.

p The colonial enslavement of China was to follow a different pattern. Officially China was still (prior to the revolution of 1911) an independent sovereign empire. In practice however the roost was ruled by competing groups of British, American, Japanese, Russian, French and German imperialists. China was at the mercy of a number of imperialist countries.

p Another form of imperialist bondage was that which could be observed in Iran at the turn of the century. For a considerable period Britain and Russia had been competing for domination of this country and finally in 1907 they signed an agreement defining their respective spheres of influence, the Russian one in the North and the British in the South, while the central part of the country was termed a neutral zone. Iran, which formally remained independent, was by this time for all practical purposes controlled by two of the Great Powers—Britain and Russia.

p Despite the variety of forms it took, some blatant, others covert, the essence of colonialism remained the same, bringing oppression, ruin, exploitation and even extermination of the peoples whom it fettered.

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In India, referred to at this period as the "pearl in the British crown”, average life expectation under British rule was no more than 26. Some of the colonial peoples such as the Maoris of New Zealand, large numbers of the Papuans of New Guinea and the Red Indians in the USA were condemned to virtual extinction.

Imperialist Rivalry Comes to a Head.
The Final Division of Europe into Armed Camps

p Growing colonial expansion, fierce rivalry for markets and spheres of capital investment, new sources of raw materials and "spheres of influence" and the drive to redivide the world which was now in full swing, all served to aggravate deep imperialist contradictions still further. Among these contradictions which divided the imperialist powers, those between Britain and Germany were the most serious. Powerful and aggressive Germany, all out to snatch its share of the colonial booty and attain world domination, was making the most of every opportunity to obstruct the interests of the British imperialists. It was quite evident that in the near future the German militarists would abandon mere economic and political pressure and resort to force against Britain.

p British diplomats found themselves obliged to abandon their former tactics. They were no longer in a position to pursue the policy of "splendid isolation" and were instead compelled to seek out allies. In 1904 Britain reached an agreement with France as to the limits of their respective colonial seizures (Egypt went to Britain, and Morocco to France) and this paved the way for the Entente Cordiale between the two countries. On a similar basis (the division of spheres of influence in Iran) Britain reached an agreement with Russia in 1907. These two agreements meant for all intents and purposes that Britain had by now joined the Franco-Russian alliance. Although Britain did not take on herself such clearly defined military obligations as France and Russia, in the context of the then tense Anglo-German relations, she naturally became one of the most active members of the Triple Entente, as the alliance came to be known.

Europe was now divided up into two powerful imperialist blocs, the Triple Alliance and the Triple Entente, both of which were actively preparing for war. In view of the fact that most of the Great Powers were members of one of these blocs, that they had sizable colonial possessions scattered over the globe, and a wide range of contacts and interests were at stake, the imminent conflagration was bound to be not merely a European but a world war.