Written in 1916, in the middle of the First World War, Lenin’s Imperialism, the Highest Stage of Capitalism is an essential work for understanding the phenomena of war and imperialism today.
[Originally published in Portuguese at colectivomarxista.org]
Lenin explains that modern imperialism is the inevitable result of the development of the productive forces under capitalism. Imperialism is therefore not the result of militaristic or nationalist values, ideas or policies, but of concrete economic imperatives.
This has key implications for the way we understand international politics today. If we consider the ongoing war in Ukraine, the Russian invasion did not take place because Putin is a ‘bad person’, or because Russian values are inherently nationalist and domineering, as opposed to Western ‘democratic values’. While ideas, cultures and political traditions have an impact on events, ultimately the decisive factor is the material, economic reality.
Russia and the United States are fighting a proxy war over spheres of influence. The war in Ukraine is not a war between ‘good’ and ‘evil’ or between democracy and authoritarianism. The war in Ukraine is the consequence of the struggle between two gangs of imperialists, vying for control over a country’s resources and markets, not only as a source of raw materials, but also as a destination for the export of goods and capital.
Unlike the empires of old, contemporary imperialism – as characterised by Lenin – is not just about conquest and plunder. It results from the expansion of the productive forces, the production of goods and the accumulation of capital which, given their development, at a certain point come into contradiction with the limitations of the market and the nation state. This gives rise to the need to conquer new markets, in order to facilitate exports.
In times of general capitalist expansion, the main powers manage, through diplomacy and negotiations, to divide up the global market. However, in times of crisis, the market shrinks, diplomacy becomes futile, and war emerges as the continuation of politics by other means.
While it is true that war becomes more acute in times of capitalist crisis, it never disappears entirely, because war is inherent to the capitalist system itself. Although imperialist powers generally tend to keep their colonies and dependent countries impoverished, this relationship is somewhat more complex and contradictory.
In Lenin's time, the export of French, English and German capital made possible the development of cutting-edge industries in Tsarist Russia, which nevertheless remained a relatively backward country compared to Western Europe. This was an example of what Trotsky characterised as “combined and uneven development”. In Russia at the time, the most advanced technologies coexisted with the most archaic techniques. While some industries developed by leaps and bounds, Russia lagged behind the more developed countries in terms of economic development.
The export of capital to China over a period of decades has allowed it to develop rapidly / Image: public domain
Nowadays, the export of capital to China over a period of decades has allowed it to develop rapidly, providing it with the most advanced industries and technologies. Although China is a leading country in various technological areas, its average productivity is still far behind that of the most advanced capitalist countries. This development is therefore uneven, as the most advanced sectors of the economy exist alongside others that are still lagging behind.
Imperialism expands the capitalist system, but this development, being uneven, inevitably ends up destabilising the power relations between the various countries. As Lenin explained:
“Half a century ago Germany was a miserable, insignificant country, if her capitalist strength is compared with that of the Britain of that time; Japan compared with Russia in the same way. Is it ‘conceivable’ that in ten or twenty years’ time the relative strength of the imperialist powers will have remained unchanged? It is out of the question.”
Just as in Lenin's time, when British hegemony was threatened by the rise of new powers, resulting in two World Wars that redivided control of the world market; so today we are witnessing the rise of China and Russia, which are challenging US hegemony.
Due to the development of nuclear weapons, a direct confrontation between the major powers is more unlikely today, but this only furthers the likelihood of proxy wars in countries such as Ukraine, Yemen, Taiwan and others.
China's role
One mistake made by the leadership of Communist Parties, such as the Portuguese Communist Party, is to deny that countries such as Russia and China are imperialist.
Certainly it is true that the greatest imperialist power in the world today remains the United States, which is the most aggressive, warmongering and reactionary force in the world. For this reason, communists are resolutely opposed to US imperialism. However, the struggle to build a better world does not involve supporting the governments of China and Russia in their disputes with the United States.
Lenin defined five fundamental features of imperialism:
- the concentration of production and capital into monopolies.
- the merging of banking with industrial capital, and the creation, on this basis, of ‘finance capital’.
- the export of capital as distinguished from the export of commodities.
- the formation of international capitalist associations which share the world among themselves.
- the territorial division of the whole world among the biggest capitalist powers.
Can anyone deny that all five of these are current features of Russian or Chinese capitalism?
Some will argue that China, since it is ruled by the Chinese Communist Party, is not a capitalist country. But this argument cannot withstand the facts. In China, there has been decades of privatisation, foreign investment and the creation and rise of a capitalist class and a private sector that accounts for 60 percent of China's GDP, 60 percent of investments, 80 percent of businesses and 80 percent of new jobs.
China is a capitalist economy, in which a highly centralised state maintains the public sector and retains elements of economic control / Image: Dong Fang, Wikimedia Commons
China is a capitalist economy, in which a highly centralised state maintains the public sector and retains elements of economic control, which are remnants of the 1949 Chinese Revolution. The elements of centralisation do not undermine China’s capitalist nature. For instance, despite areas of the economy having been nationalised, Portugal has never had a “socialist” economy. Public companies, agricultural cooperatives and self-managed companies have continued to work according to the laws of the capitalist system.
A country's foreign policy is the manifestation of the interests of its ruling class. China’s plans to build ports, roads, airports and railways in other countries, as part of its “New Silk Road” initiative, are neither innovative nor philanthropic. This is simply the export of capital. British imperialism did the same in India during the 19th century. The fact that China has not yet shown imperialist aggression comparable to that of the United States is due to its role as a minor, albeit rising, imperialist power.
The United States continues to play the role of the world's policeman and, given the difference in military power between China and the United States, the former has so far preferred to develop its sphere of influence through trade, diplomacy and so-called soft power.
This has not, however, prevented China from massively expanding its military. China has the second largest military budget in the world. Sooner or later, the enormous military power that is being built up will be used in defence of China's “national interests”, that is, in defence of the interests of its ruling class.
The concentration of capital
The concentration of capital, the formation of monopolies, the growth of finance capital and the development of international capitalist associations are the central features of contemporary imperialism.
At the dawn of capitalism, a number of small companies competed for their place in the market. This led to the strengthening of some companies, the absorption and merger of others and the disappearance of many more. A hundred years ago, when Lenin wrote Imperialism, the Highest Stage of Capitalism, monopolies were already dominant. Rather than competing with each other in a “free market”, these monopolies distorted and manipulated the market to their own ends.
Just as the concentration of capital allowed banks to cease to be mere intermediaries and instead exercise control over production and investment, so the control of financial capital over national governments has intensified.
Due to globalisation and the creation of international capitalist associations, nations protect, serve and maintain close relations with these groups. And they are willing to fight for them, whether in the form of trade sanctions (such as those against Russia), the imposition of barriers and customs duties (such as those against China), or in the form of an open, armed conflict.
Shortly before the First World War broke out, Kautsky (one of the leaders of the social democrats) argued that the creation of international capitalist cartels would reduce the inequalities and contradictions inherent in world capitalism. The Great War proved this false in practice, while Lenin’s Imperialism, the highest stage of capitalism proved this wrong in theory too. Indeed, the last 100 years has shown conclusively that finance capital has only increased inequality between the different parts of the world economy, exacerbating imperialist rivalries and perpetual war.
The last 100 years has shown that finance capital has only increased inequality between the different parts of the world economy, exacerbating imperialist rivalries and perpetual war / Image: Ministry of Defense of Ukraine, Wikimedia Commons
The concentration of capital and dominance of finance capital were the cornerstones of Lenin's characterisation of the imperialist phase of capitalism, but even he would be astounded by the extent of these today.
Twelve years ago, three academics from the Swiss Institute of Technology put together a database of 37 million companies and 43,000 international corporations, noting which companies had shares in other companies. They tracked where different companies’ income came from and mapped the entire edifice of the world economy. They came to the astonishing conclusion that just 147 of these companies control 40 percent of the total wealth on the planet. In addition, just 737 companies control 80 percent of the global economy. The tendencies of the capitalist system, which Lenin exposed, have only become more pronounced over the last 100 years.
In his work, Lenin also stated that imperialist domination gave a parasitic character to the main imperialist countries, in which part of the population lived off the dividends extracted from investments abroad. These large profits in some countries made it possible for the imperialist ruling class to bribe the most privileged layers of the working class, forming a “labour aristocracy”. This, therefore, allowed the ruling class to achieve a certain social peace and funnel opposition to imperialism into “democratic” and “pacifist” channels.
There are clear similarities here with the opposition that, even today, certain leftists continue to express towards imperialist aggression. Lenin rightly explained that socialism was the only alternative to imperialism. The capitalist system is so rotten that even in the most developed countries, it is no longer possible to bribe the “labour aristocracy”. On the contrary, what we are seeing is a constant attack on the rights and gains that were won by workers in the past. What we are seeing now is a new generation of workers that is facing bleaker prospects than their parents and grandparents.
Imperialism, the Highest Stage of Capitalism remains an absolutely up-to-date work, demonstrating Lenin's genius, but above all the validity of Marxism as a theory for analysing and understanding the world. Nonetheless, it is not enough to interpret the world, the point is to change it!
Capitalism cannot be reformed, but it will not collapse on its own either. It has to be overthrown. If capitalism is not overthrown, it will always be able to temporarily overcome its crises and contradictions at the cost of the working class, by perpetuating exploitation, inequality, imperialism and war.
To overthrow capitalism, we need to get organised and build a revolutionary party.