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Issue #1801      November 1, 2017

Imperialism, the Highest Stage of Capitalism *

Its relevance today

Lenin studied the new political, economic and social phenomena that had emerged and were still developing in capitalist societies since the death of Marx and Engels. In doing so he laid the basis for revolutionary struggle, in particular, the Great October Socialist Revolution in 1917.

Imperialism, the Highest Stage of Capitalism is one of the most widely read and important of the classics written by Lenin. It is a tribute to the brilliance of Lenin’s ability to research, analyse, understand and draw conclusions about the world around him, and in particular to apply the science of Marxism to change.

Since the time of Lenin there have been considerable and rapid changes, many of which would have been the realm of science fiction at the time of Lenin. These developments require study and analysis, and to ask whether the essence of imperialism as defined by Lenin in Imperialism, the Highest Stage of Capitalism remains valid today. There are certainly some on the left who do not believe so.

Imperialism, the Highest Stage of Capitalism refers to a new epoch, imperialism, which Lenin describes as the highest stage of development of capitalism.

Thus, the first question to ask is if 100 years on we are still living under capitalism, and the answer is surely “yes”.

The fundamental characteristics of capitalism still apply. Workers sell their labour power, the means of production or delivery of services are privately owned and appropriated. Workers are still exploited – are not paid the full value of their labour power resulting in the creation of surplus value (profits).

The forms that this exploitation takes and the many guises that capitalism has developed to cover up this process and the class nature of society have changed but in essence it is still capitalism.

Imperialism, the Highest Stage of Capitalism deals with the economic characteristics of imperialism. Lenin makes reference to but does not elaborate on other types of characteristics in this publication. There is much that could be said about the political, cultural, ideological, military, environmental and other features. It is the economic that drives the political and military.

Monopoly capitalism

In defining imperialism Lenin pointed to qualitative changes within capitalism. The most important of these is the development of monopoly capitalism.

“…the rise of monopolies, as the result of the concentration of production, is a general fundamental law of the present stage of development of capitalism.” (Lenin, Imperialism, the Highest Stage of Capitalism, Chapter I, Progress Publishers)

“... the old capitalism, the capitalism of free competition with its indispensable regulator, the Stock Exchange, is passing away. A new capitalism has come to take its place, bearing obvious features of something transient, a mixture of free competition and monopoly.” (Ch. II)

“We have seen that in its economic essence imperialism is monopoly capitalism. This in itself determines its place in history, for monopoly that grows out of the soil of free competition, and precisely out of free competition, is the transition from the capitalist system to a higher socio-economic order.” (Ch.X)

This reference to a higher socio-economic order was socialism – a word he avoided using to get past the censors.

“And so, without forgetting the conditional and relative value of all definitions in general, which can never embrace all the concatenations of a phenomenon in its full development, we must give a definition of imperialism that will include the following five of its basic features:

  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.

“Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun; in which the division of all territories of the globe among the biggest capitalist powers has been completed.” (Ch. VII)

Lenin pays considerable attention to the concentration of production and capital and development of monopolies.

This process has accelerated in recent decades with the rapid development of the scientific and technological revolution. IT, modern communications and transportation have made possible what would have seemed like science fiction at the time of Lenin.

Concentration of capital

A couple of examples to illustrate this process at work today:

Bayer and Monsanto signed a definitive agreement for Bayer to acquire Monsanto for US$66 billion. This mega-merger is about global control of seeds, GM technology, pesticides, farm machinery and other agricultural inputs, food security, the future of biodiversity and who will control Big Data in agriculture.

There are several other mergers in the making if they can get past regulatory authorities. Companies such as BASF which is the third largest in crop chemicals and a modest player in seeds is looking to snap up small seed and pesticide companies – if it doesn’t get bigger it will be lost to the big players.

Three big companies, led by John Deere, control 77 percent of the world’s US$65 billion farm machinery market. All three are developing robotic farm machines designed to dispense seeds, pesticides, and fertilisers and all are striving for meter-by-meter control.

Three companies control 53 percent of the global commercial seed market. This has resulted in a dramatic loss of genetic diversity as companies offered only the most profitable lines of seeds for sale and abandoned the rest. Already, six companies control 75 percent of global seed and pesticide sales and related research and development.

Chinese state-owned China National Chemical Corp was cleared by US regulators last year to proceed with a US$42 billion purchase of Swiss chemical and seeds company Syngenta. (etc.org)

Consumer advocates summed the situation up saying the mergers will usher in a “new era of sterile crops soaked in dangerous pesticides.”

Dow Chemicals and DuPont agreed to a US$59 billion merger that would bring under the one umbrella two of the largest US chemical makers.

There are several other mergers in the making if they can get past regulatory authorities.

Contradictions

The modern world is so much more complex than at the time of Lenin. Lenin stated that increased concentration of production would result in new and more intense contradictions. He was right.

Today we are witnessing a widening of the wealth gap midst record wealth creation, mass starvation midst a plenty of food production, climate change a direct result of the pursuit of profit regardless of consequences, scientific advance but its application not put to its potential use, wastage on military and wars, medical developments capable of saving lives but access denied because of patenting systems and the lack of ability to pay.

These contradictions are also seen in financial and economic crises, water crisis, food crisis, amongst others. Capitalism is in deep crisis and cannot find a way out.

Bank capital

“The principal and primary function of banks is to serve as middlemen in the making of payments. In so doing they transform inactive money capital into active, that is, into capital yielding a profit; they collect all kinds of money revenues and place them at the disposal of the capitalist class,” Lenin noted. (Ch. II)

“As banking develops and becomes concentrated in a small number of establishments, the banks grow from modest middlemen into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw materials in any one country and in a number of countries.

“This transformation of numerous modest middlemen into a handful of monopolists is one of the fundamental processes in the growth of capitalism into capitalist imperialism; for this reason we must first of all examine the concentration of banking.” (Ch. II)

Lenin outlines the struggles between banks for power and domination and the process of concentration of banks – through such means as mergers, takeovers, formation of holding companies, etc.

This process has not ceased since the time of Lenin. With globalisation and technological developments it has accelerated and undergone qualitative changes, in particular in respect to their monopolisation and domination on a global scale and their expansion beyond that of middlemen between borrowers and depositors.

Australia is a classic example of the outcomes of this process, in particular since financial deregulation and privatisation under Treasurer Paul Keating during the Hawke-Keating governments in the 1980s. At one stage there were well over 100 banks operating in Australia, including the state-owned Commonwealth Bank and state banks.

Since then, there have been numerous takeovers. All of the state-owned banks have been privatised and swallowed up by big banks.

The Keating government permitted the entry of foreign banks and foreign ownership with some restrictions. Virtually the only curb on the process of monopolisation has been the four pillar policy preventing mergers of the Big Four with each other.

St George, BankWest, the Advance Bank, the National Mutual Royal Bank, the Town & Country Bank, the Bank of New Zealand and the Bank of Melbourne are some of the more recent banks to be taken over.

As result, the Big Four enjoy incredible market dominance and the extraordinary power that comes with such monopoly of the banking sector.

In 2008, the Big Four banks monopolised 75 percent of the banking sector with CBA holding the largest share at 22 percent. By 2016 they monopolised 83 percent of the industry with CBA having increased its share to just over 26 percent.

The remainder of banking business is shared among 57 other banks, most of whom are subsidiaries of foreign banks with a limited presence in Australia.

End Part I. Next week: Part II looks at what Lenin had to say about finance capital and state monopoly capitalism with the use of current examples to validate his analysis.

*Imperialism, the Highest Stage of Capitalism can be purchased as a stand-alone pamphlet from the Party’s bookshop. It is also available in Lenin’s Collected Works, Vol 22, Progress Publishers.

Next article – In “war on coal”, coal has lost

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