In 1917, Imperialism: The Highest Stage of Capitalism by Vladimir I. Lenin was published. It became a classic work, influencing labor and anti-colonial movements and intellectuals connected to them during the course of the twentieth century. The book by the leader of the Russian Revolution described important new dynamics in the development of capitalism.
Concentration and monopolization. By the beginning of the twentieth century, the old form of capitalism had given way to a new form of capitalism. The old capitalism was characterized by free competition among a variety of enterprises of various sizes. The new capitalism is characterized by the concentration of industry and the tendency toward the formation of monopolies in the form of combines, cartels, syndicates, etc. (Lenin 1996:11-23). “This transformation of competition into monopoly is one of the most important – if not the most important – phenomena of modern capitalist economy” (Lenin 1996:12).
The concentration of banking also occurs. The big banks provide credit for industrial production. Close ties are established between the big banks and the biggest industrial and commercial enterprises. This is the stage of “finance capital” (Lenin 1996:27-59).
The export of capital. During the stage of finance and monopoly capitalism, capitalists find that the most profitable investment is not in the domestic economy, but in “backward countries,” where the prices of land and wages are low, raw materials are cheap, and profits are high (Lenin 1996:62). So there emerges the exportation of capital, in which big banks and big industry invest surplus capital in profitable enterprises in the peripheral and semi-peripheral regions. “Under the old capitalism, when free competition prevailed, the export of goods was the most typical feature. Under modern capitalism, when monopolies prevail, the export of capital has become the typical feature” (Lenin 1996:61).
In the “backward countries,” the capitalist investor or creditor receives advantages of a commercial-political nature, including stipulations that the borrower use the loan to purchase manufactured goods from the country of the creditor. Thus the export of capital becomes a means for the export of manufactured goods to the countries and colonies of the periphery and semi-periphery (Lenin 1996:64-65).
The division of the world market among capitalist combines. In the stage of monopoly capitalism, the major combines and cartels arrive at agreements which divide among themselves the world market. For example, General Electric Company (USA) and General Electric Company (Germany) agreed that the former would have the markets of the United States and Canada and the latter would have the markets of Europe. Similar agreements are found in the oil, shipping, railroad, and steel industries (Lenin 1996:67-75).
The division of the world among the great powers. In the last quarter of the nineteenth century, the occupation and division of the earth by the European colonial powers was completed (Lenin 1996:77-82). Colonial possession gives monopolist combines control over the raw materials of the colonial territories (Lenin 1996:83-85). The division of the world into colonizer and colonized is an important feature of capitalism in its finance and monopoly stage (Lenin 1996:86).
Lenin’s penetrating analysis of the imperialist stage of capitalist development enables us to understand that at the dawn of the twentieth century there had emerged a new form of capitalism, characterized by the concentration of industry and banking, in which large corporations and banks would become increasingly transnational, and they would have access to raw materials and influence over the political processes of the nations of the peripheral and semi-peripheral regions. The transnational corporations would become in the twentieth century an important mechanism of core domination. They would have such force that they would make direct political control unnecessary. Thus, they would render outdated the formal structures of colonial domination, and they would make possible a new form of domination, apparently but not actually consistent with democratic values, which came to be known as neocolonialism.
Lenin, V.I. 1996. Imperialism: The Highest Stage of Capitalism. Introduction by Norman Lewis and James Malone. Chicago: Pluto Press.
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment