Imperialism

1. Capitalism evolves from free competition to monopoly.

This transformation of competition into monopoly is one of the most important--if not the most important--phenomena of modern capitalist economy...

Natural progression. Capitalism, driven by competition, inevitably leads to the concentration of production in larger and larger enterprises. This concentration, at a certain stage, naturally gives rise to monopolies. The very scale of giant enterprises makes competition difficult and encourages agreements.

Historical shift. The late 19th and early 20th centuries marked a turning point. While free competition peaked in the 1860s-1870s, the depression of the 1870s and the boom of the 1890s accelerated the formation of cartels and syndicates. By the early 1900s, monopolies became a foundation of economic life, fundamentally changing capitalism.

Beyond theory. What Marx predicted through theoretical analysis – that free competition would lead to concentration and then monopoly – became a concrete reality. Despite bourgeois economists claiming Marxism was refuted, the facts of widespread monopolies in industries like iron, steel, and chemicals proved the transformation was a general law of capitalist development.

2. Concentration of production creates giant monopolies dominating industry.

Tens of thousands of huge enterprises are everything; millions of small ones are nothing.

Scale matters. Modern statistics show an extreme concentration of production power. In Germany, less than 1% of enterprises utilized over three-fourths of the total steam and electric power. In the U.S., about 1% of enterprises accounted for nearly half of total industrial output.

Giants emerge. This concentration results in a handful of giant enterprises dominating entire branches of industry. These entities, often formed through combinations of different production stages, gain significant advantages:

• More stable profits by leveling trade fluctuations
• Elimination of trade middlemen
• Ability to implement technical improvements for superprofits
• Stronger position during economic depressions

Compulsory submission. Monopolies don't just compete; they actively suppress smaller rivals. Methods include stopping raw material supplies, cutting prices below cost ("dumping"), stopping credits, and boycotts. This isn't competition between small and large, but monopolists throttling those who don't submit to their dictation.

3. Banks merge with industry, forming powerful finance capital.

This bank capital, i.e., capital in money form, which is thus actually transformed into industrial capital, I call 'finance capital.'

Beyond middlemen. Banks, originally intermediaries for payments, evolve with capitalist concentration. As they grow and consolidate, they command vast sums of money capital from various sources. This allows them to move beyond simple transactions to actively investing in and controlling industrial enterprises.

Coalescence occurs. The merging of bank and industrial capital is a defining feature of this new stage. Banks acquire holdings in industrial companies, and bank directors join the boards of industrial firms, and vice versa. This "personal union" solidifies the link, creating a single, intertwined financial and industrial power structure.

Control mechanism. This merger gives banks immense power over industry. Through credit, shareholdings, and directorships, banks gain detailed knowledge of firms' financial positions, allowing them to control, influence, and ultimately determine the fate of businesses. This transforms scattered capitalists into a single collective capitalist entity.

4. Finance capital establishes a ruling financial oligarchy.

...the three hundred men, who today govern Germany economically, will gradually be reduced to fifty, twenty-five or still fewer.

Rule by the few. The concentration of finance capital in a handful of giant banks and trusts leads to the emergence of a financial oligarchy. This small group of financial magnates holds immense economic power, controlling billions in capital and dominating vast spheres of production and commerce.

Holding system power. The "holding system" is a key tool for this oligarchy. By owning a controlling stake (often less than 50%) in a "mother company," which in turn controls "daughter companies," and so on, a relatively small amount of capital at the top can control enormous amounts of capital across multiple layers of subsidiaries.

Beyond economics. The influence of the financial oligarchy extends beyond the purely economic sphere. They exert control over:

• Stock exchanges, which lose their role as automatic regulators
• Government officials, who are often drawn into lucrative positions in banks and trusts
• Public life in general, regardless of the formal political system

This rule is characterized by manipulation, speculation, and the pursuit of enormous profits from financial operations like issuing securities and reconstructing failing companies.

5. Export of capital becomes the defining feature of imperialism.

As long as capitalism remains what it is, surplus capital will be utilized not for the purpose of raising the standard of living of the masses in a given country... but for the purpose of increasing profits by exporting capital abroad to the backward countries.

Shift in focus. While the old capitalism was characterized by the export of goods, the new stage, dominated by monopolies, is defined by the export of capital. Advanced capitalist countries accumulate vast amounts of "superfluous" capital that cannot find sufficiently profitable investment opportunities domestically due to factors like lagging agriculture and impoverished masses.

Seeking higher profits. This surplus capital flows to backward countries where:

• Capital is scarce, leading to high profits
• Land and raw materials are cheap
• Wages are low

The possibility of this export is facilitated by these countries being drawn into the world capitalist system, often through infrastructure development like railways.

Securing advantages. Capital export is not merely an economic transaction; it's a tool of imperialist policy. Creditor nations use loans to secure favorable terms, concessions, and orders for goods (especially military materials) from debtor countries. This intertwines finance capital with diplomacy and military power, extending the reach of the financial oligarchy globally.

6. International monopolies divide the world economically.

...the division of the world is completed, and the big consumers, primarily the state railways--since the world has been parceled out without consideration for their interests--can now dwell like the poet in the heaven of Jupiter.

Beyond national borders. Monopolist combines, having seized control of their home markets, inevitably expand internationally. This leads to agreements between powerful national monopolies to divide the world market among themselves.

Super-monopolies. International cartels represent a higher stage of capital concentration. Examples include:

• The agreement between the German and American electrical trusts to divide the world market.
• The struggle and eventual agreement between the Standard Oil trust and German banks over the oil market.
• The International Rail Cartel, which apportioned foreign markets among manufacturers from different countries.

Temporary truces. These international agreements are not signs of lasting peace but temporary truces in the ongoing struggle for profits and market share. They are based on the current balance of power between the participating monopolies and are subject to change and redivision, often through non-peaceful means.

7. The world is completely divided territorially among the great powers.

For the first time the world is completely divided up, so that in the future only redivision is possible, i.e., territories can only pass from one "owner" to another...

Final partition. The period from the 1880s to the early 20th century saw an intense scramble for colonies, resulting in the complete territorial division of the globe among the major capitalist powers. There were no significant "unoccupied" territories left to seize.

Uneven expansion. Colonial possessions expanded dramatically during this period, particularly for countries like Great Britain, France, and Germany. This expansion was closely linked to the transition to monopoly capitalism and finance capital.

Basis for conflict. This completed division means that future expansion can only occur through the redivision of existing territories, taking them from one power and giving them to another. This inherent need for redivision, driven by the uneven development of capitalist powers, is a fundamental cause of imperialist wars.

Beyond colonies. The division extends beyond formal colonies to include "semicolonial" countries (like Persia, China, Turkey) and financially dependent states (like Argentina, Portugal), which are enmeshed in the financial and diplomatic networks of the great powers.

8. Imperialism is the monopoly stage of capitalism.

Imperialism is capitalism in that stage of development in which the dominance of monopolies and finance capital has established itself; 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.

Defining features. Imperialism is not just a policy but a specific, highest stage of capitalism characterized by five key economic features:

• Dominance of monopolies in economic life.
• Merging of bank and industrial capital to form finance capital, ruled by a financial oligarchy.
• Exceptional importance of capital export.
• Formation of international monopolist combines dividing the world.
• Completion of the territorial division of the world by the great powers.

Historical context. This stage emerged around the beginning of the 20th century, representing a qualitative transformation from the earlier stage of free competition. While boundaries are fluid, this period marks the definite shift.

Beyond economics. While this definition focuses on economic aspects, imperialism also has specific political features, primarily a striving towards violence, reaction, and increased national oppression, stemming directly from the economic dominance of the financial oligarchy and the struggle for global control.

9. Imperialism leads to parasitism and decay in leading nations.

The rentier state is a state of parasitic, decaying capitalism...

Monopoly's effect. Monopoly, while driving concentration, also introduces a tendency towards stagnation and decay. With guaranteed high profits, the incentive for technical progress can be reduced, and monopolies may even deliberately hinder innovation (like the bottle machine patent example).

Rentier class. Imperialism involves the accumulation of vast money capital in a few countries, leading to the growth of a rentier class living off income from foreign investments ("clipping coupons"). This class is detached from production, and their existence marks the parasitic nature of the rentier state.

Exploiting the world. Countries exporting capital become usurer states, exploiting the labor of overseas countries and colonies. Income from foreign investments can far exceed income from foreign trade, providing a solid basis for this parasitism. This can lead to a decline in the proportion of the population engaged in productive labor and a shift towards service or non-productive roles.

10. Imperialism fosters opportunism within the working class.

The English proletariat is becoming more and more bourgeois, so that this most bourgeois of all nations is apparently aiming ultimately at the possession of a bourgeois aristocracy, and a bourgeois proletariat as well as a bourgeoisie.

Economic basis for bribery. The enormous superprofits generated by monopolies and the exploitation of colonies provide the economic possibility for the capitalist class in imperialist countries to bribe the upper strata of the working class. This creates a privileged layer, often called the "labor aristocracy."

Agents of the bourgeoisie. This bourgeoisified stratum, comfortable in their lifestyle and outlook, becomes the main social prop for the bourgeoisie within the working-class movement. They act as "labor lieutenants of the capitalist class," promoting reformism and chauvinism and siding with the bourgeoisie in times of class conflict.

Historical precedent. This phenomenon was observed by Marx and Engels in 19th-century Britain, which held a colonial and market monopoly. They noted how a section of the British workers benefited from this exploitation and were led by men influenced by the bourgeoisie. Imperialism at the turn of the century generalized this tendency across several great powers.

11. Bourgeois critiques of imperialism are superficial and reformist.

The reply of the proletariat to the economic policy of finance capital, to imperialism, cannot be free trade, but Socialism.

Ignoring the roots. Many bourgeois critics, even those who expose aspects like the power of banks or the financial oligarchy, fail to grasp the fundamental connection between imperialism and the economic base of monopoly capitalism. They often contrast imperialism with outdated ideals like free competition or "peaceful democracy."

Pious wishes. Their proposed "reforms," such as police supervision of trusts or appeals for peace under capitalism, are seen as superficial and ineffective because they do not challenge the underlying economic structure of monopolies and finance capital. Such critiques amount to "pious wishes" that evade the deep contradictions.

Reactionary ideal. Advocating for a return to free competition or relying on "mere economic factors" in the age of finance capital is a reactionary stance. It objectively serves to obscure the true nature of imperialism and distract from the necessary revolutionary struggle against the capitalist system itself, which has evolved to this monopoly stage.

12. The idea of "ultra-imperialism" is a reactionary fantasy.

"From the purely economic point of view," writes Kautsky, "it is not impossible that capitalism will yet go through a new phase, that of the extension of the policy of the cartels to foreign policy, the phase of ultra-imperialism,"...

Misleading concept. The theory of "ultra-imperialism," suggesting a future phase of peaceful union among international finance capital, is fundamentally flawed. While international cartels and alliances exist, they are temporary arrangements based on the current balance of power, not a permanent elimination of conflict.

Ignoring contradictions. This theory ignores the inherent uneven development of capitalism and the fundamental contradictions between competing national finance capitals and their states. The struggle for redivision of the world, based on changing economic and military strength, is inevitable under capitalism.

Serving reaction. By presenting a prospect of permanent peace under capitalism, the theory of ultra-imperialism serves a reactionary purpose. It distracts the working class from the acute antagonisms of the imperialist era and promotes illusions about reforming capitalism instead of fighting for its abolition. It is a form of bourgeois pacifism dressed up as Marxism.

Last updated: August 7, 2025