Imperialism, the Highest Stage of Capitalism

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Imperialism, the Highest Stage of Capitalism
Lenine, Imperialisme stade supreme du capitalisme.jpg
Author Vladimir Lenin
Original titleИмпериализм как высшая стадия капитализма
CountryRussian Republic
GenreSocial criticism
Published1917 (written 1916)

Imperialism, the Highest Stage of Capitalism (1917), by Vladimir Lenin, describes the function of financial capital in generating profits from imperialist colonialism as the final stage of capitalist development to ensure greater profits. The essay is a synthesis of Lenin's modifications and developments of economic theories that Karl Marx formulated in Das Kapital (1867). [1]

Vladimir Lenin Russian politician, communist theorist and founder of the Soviet Union

Vladimir Ilyich Ulyanov, better known by the alias Lenin, was a Russian revolutionary, politician, and political theorist. He served as head of government of Soviet Russia from 1917 to 1924 and of the Soviet Union from 1922 to 1924. Under his administration, Russia and then the wider Soviet Union became a one-party communist state governed by the Russian Communist Party. Ideologically a communist, he developed a variant of Marxism known as Leninism; his ideas were posthumously codified as Marxism-Leninism.

Financial capital is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based, i.e. retail, corporate, investment banking, etc.

In economics, profit in the accounting sense of the excess of revenue over cost is the sum of two components: normal profit and economic profit. Normal profit is the profit that is necessary to just cover the opportunity costs of the owner-manager or of the firm's investors. In the absence of this profit, these parties would withdraw their time and funds from the firm and use them to better advantage elsewhere. In contrast, economic profit, sometimes called excess profit, is profit in excess of what is required to cover the opportunity costs.



In his Prefaces, Lenin states that the First World War (1914–1918) was "an annexationist, predatory, plunderous war" [2] among empires, whose historical and economic background must be studied "to understand and appraise modern war and modern politics". [3]

World War I 1914–1918 global war originating in Europe

World War I, also known as the First World War or the Great War, was a global war originating in Europe that lasted from 28 July 1914 to 11 November 1918. Contemporaneously described as "the war to end all wars", it led to the mobilisation of more than 70 million military personnel, including 60 million Europeans, making it one of the largest wars in history. It is also one of the deadliest conflicts in history, with an estimated nine million combatants and seven million civilian deaths as a direct result of the war, while resulting genocides and the 1918 influenza pandemic caused another 50 to 100 million deaths worldwide.

Empire geographically extensive group of states and peoples united and ruled either by a central authority or a central figure

An empire is a sovereign state functioning as an aggregate of nations or people that are ruled over by an emperor or another kind of monarch. The territory and population of an empire is commonly of greater extent than the one of a kingdom.

In order for capitalism to generate greater profits than the home market can yield, the merging of banks and industrial cartels produces finance capitalism—the exportation and investment of capital to countries with underdeveloped economies. In turn, such financial behaviour leads to the division of the world among monopolist business companies and the great powers. Moreover, in the course of colonizing undeveloped countries, business and government eventually will engage in geopolitical conflict over the economic exploitation of large portions of the geographic world and its populaces. Therefore, imperialism is the highest (advanced) stage of capitalism, requiring monopolies (of labour and natural-resource exploitation) and the exportation of finance capital (rather than goods) to sustain colonialism, which is an integral function of said economic model. [4] [5] Furthermore, in the capitalist homeland, the super-profits yielded by the colonial exploitation of a people and their economy permit businessmen to bribe native politicians, labour leaders and the labour aristocracy (upper stratum of the working class) to politically thwart worker revolt (labour strike).

Bank financial institution

A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.

Finance capitalism

Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system.

In economics, capital consists of an asset that can enhance one's power to perform economically useful work. For example, in a fundamental sense a stone or an arrow is capital for a caveman who can use it as a hunting instrument, while roads are capital for inhabitants of a city.

Theoretical development

Lenin's socio–political analysis of empire as the ultimate stage of capitalism derived from Imperialism: A Study (1902) by John A. Hobson, an English economist, and Finance Capital (Das Finanzcapital, 1910) by Rudolf Hilferding, an Austrian Marxist, whose synthesis Lenin applied to the new geopolitical circumstances of the First World War, wherein capitalist imperial competition had provoked global war among the German Empire, the British Empire, the French Empire, the Tsarist Russian Empire, and their respective allies.

John Atkinson Hobson, was an English economist, social scientist and critic of imperialism, widely popular as a lecturer and writer.

Rudolf Hilferding German politician

Rudolf Hilferding was an Austrian-born Marxist economist, leading socialist theorist, politician and chief theoretician for the Social Democratic Party of Germany (SPD) during the Weimar Republic, almost universally recognized as the SPD's foremost theoretician of his century, and a physician.

German Empire empire in Central Europe between 1871–1918

The German Empire, also known as Imperial Germany, was the German nation state that existed from the unification of Germany in 1871 until the abdication of Kaiser Wilhelm II in 1918.

Three years earlier, in 1914, rival Marxist Karl Kautsky proposed a theory of capitalist coalition, wherein the imperial powers would unite and subsume their nationalist and economic antagonisms to a system of ultra-imperialism, whereby they would jointly effect the colonialist exploitation of the underdeveloped world. Lenin countered Kautsky by proposing that the balance of power among the imperial capitalist states continually changed, thereby disallowing the political unity of ultra-imperialism, and that such instability motivated competition and conflict, rather than co-operation:

Karl Kautsky Czech-Austrian philosopher, journalist, and Marxist theoretician

Karl Johann Kautsky was a Czech-Austrian philosopher, journalist, and Marxist theoretician. Kautsky was recognized as among the most authoritative promulgators of Orthodox Marxism after the death of Friedrich Engels in 1895 until the outbreak of World War I in 1914.

Nationalism is a political, social, and economic ideology and movement characterized by the promotion of the interests of a particular nation, especially with the aim of gaining and maintaining the nation's sovereignty (self-governance) over its homeland. Nationalism holds that each nation should govern itself, free from outside interference (self-determination), that a nation is a natural and ideal basis for a polity, and that the nation is the only rightful source of political power. It further aims to build and maintain a single national identity—based on shared social characteristics such as culture, language, religion, politics, and belief in a shared singular history—and to promote national unity or solidarity. Nationalism, therefore, seeks to preserve and foster a nation's traditional culture, and cultural revivals have been associated with nationalist movements. It also encourages pride in national achievements, and is closely linked to patriotism. Nationalism is often combined with other ideologies, such as conservatism or socialism for example.

Ultra-imperialism, or occasionally hyperimperialism and formerly super-imperialism, is a potential, comparatively peaceful phase of capitalism, meaning after or beyond imperialism. It was described mainly by Karl Kautsky. Post-imperialism is sometimes used as a synonym of ultra-imperialism, although it can have distinct meanings.

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 will have remained unchanged?" It is out of the question. [6] [7]

The post-War edition of Imperialism, the Highest Stage of Capitalism (1920) identified the territorially punitive Russo–German Treaty of Brest-Litovsk (1918) and the Allied–German Treaty of Versailles (1919) as proofs that empire and hegemony—not nationalism—were the economic motivations for the First World War. [8] In the preface to the French and German editions of the essay, Lenin proposed that revolt against the capitalist global system would be effected with the "thousand million people" of the colonies and semi-colonies (the system's weak points), rather than with the urban workers of the industrialised societies of Western Europe. [9] He proposed that revolution would extend to the advanced (industrial) capitalist countries from the underdeveloped countries, such as Tsarist Russia, where he and the Bolsheviks had successfully seized political command of the October Revolution of 1917. [10] In political praxis, Lenin expected to realise the theory of Imperialism, the Highest Stage of Capitalism via the Third International (1919–1943), which he intellectually and politically dominated in the July and August conferences of 1920. [11]

Intellectual influence

Immanuel Wallerstein, an exponent of the World-systems theory. (ca. 2008) Immanuel Wallerstein.2008.jpg
Immanuel Wallerstein, an exponent of the World-systems theory. (ca. 2008)

The core–periphery model of global capitalist exploitation, developed by Lenin in the early 20th century, exerted much intellectual influence upon world-systems theory. World-systems theory was developed by the social scientist Immanuel Wallerstein and emphasises world systems of international labour, that divide the world into core countries, semi-periphery countries, and periphery countries. The core–periphery model also influenced dependency theory, whose proponents Raúl Prebisch, Andre Gunder Frank and Fernando Henrique Cardoso propose that natural resources flow from a periphery of poor and underdeveloped countries to a core of wealthy and developed countries, enriching the latter at the expense of the former, because of how the poor countries are integrated to the global economy. [12]

Publication history

In 1916, Lenin wrote Imperialism, the Highest Stage of Capitalism, in Zürich, during the January–June period. The essay was first published by Zhizn i Znaniye (Life and Knowledge) Publishers, Petrograd, in mid 1917. After the First World War, he added a new Preface (6 July 1920) for the French and German editions, which was first published in the Communist International No. 18 (1921). [13]


See also

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Within Marxist theory, modern warfare is described as existing as result of capitalism. Marxist theory states that all modern wars are caused by competition for resources and markets between great and imperialist powers, claiming these wars are a natural result of the free market and a class system.

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  1. John Baylis and Steve Smith (2005) The Globalization of World Politics OUP: p. 231
  2. “Imperialism and Capitalism” in the Communist International, No. 18, October 1921. p. 3.
  3. “Imperialism, The Highest Stage of Capitalism Preface April 26, 1917.
  4. Paul Bowles (2007) Capitalism, Pearson: London. pp. 91–93
  5. Imperialism the Highest Stage of Capitalism III. Finance Capital and the Financial Oligarchy
  6. Alex Callinicos (2009) Imperialism and Global Political Economy. Cambridge: Polity Press. p. 65.
  7. Lenin Imperialism: The Highest Stage of Capitalism .
  8. Christopher Read (2005) Lenin. London: Routledge. pp. 116–126
  9. Vladimir Lenin (2000) Imperialism, the Highest Stage of Capitalism pp. 37–38
  10. Christopher Read (2005) Lenin. London: Routledge. pp. 116–126
  11. Prabhat Patnaik (2000) "Introduction" to Imperialism: The Highest Stage of Capitalism, by Lenin. New Dehli, Leftword Books. pp. 10–11
  12. John Baylis and Steve Smith (2005) The Globalization of World Politics. OUP: pp. 231–235
  13. Vladimir Lenin (2000) Imperialism, the Highest Stage of Capitalism, with Introduction by Prabhat Patnaik, New Delhi: LeftWord Books