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On Imperialism and World Economy

 N.I. Bukharin

Part 3 - Imperialism as the Reproduction of Capitalist Competition on a Larger Scale

Imperialism as an Historic Category

In the preceding chapters we undertook to prove that imperialist policies arise only on a certain level of historic development. A number of contradictions of capitalism are here tied up into one knot, which is cut by the sword of war, only to be tied again more tightly the next moment. The policy of the ruling classes, and their ideology inevitably arising from this stage of development, must therefore be characterized as a specific Phenomenon.1)

 

In the literature that floods the market at present, there prevail two, soi-distant, theories of imperialism. One sees in the modern policy of conquest a struggle of races. The "Slavs" or the "Teutonic" races are supposed to strive for domination, and all virtues and vices are distributed among those "races" according to the nationality of the author. Old and vulgar as this "theory" is, it persists with a tenacity of a prejudice, for it finds a very favourable soil in the growth of "national self-consciousness" among the ruling classes who are directly interested in utilising the remnants of old psychological stratifications for the interest of the state organisation of finance capital.
 

A simple reference to facts shatters this theory, leaving not a single stone of the entire edifice. The Anglo-Saxons, of the same origin as the Germans, are their cruelest enemies; the Bulgarians and the Serbs, pure Slavs, speaking almost the same language, find themselves on different sides of the trenches. The Poles are recruiting among themselves ardent partisans of both Austrian and Russian orientation. The same is happening with the Ukrainians, one section of whom is in sympathy with the Russians, while another is in sympathy with the Austrians. On the other hand, every one of the belligerent coalitions combines the most heterogeneous races, nationalities, tribes. Looked at from a racial point of view, what is there common to the English, Italians, Russians, Spanish and the black savages of the French colonies, whom the "glorious republic" is driving to slaughter, just as the ancient Romans drove their colonial slaves? What is there common to the Germans and the Czechs, the Ukrainians and the Hungarians, the Bulgarians and the Turks who proceed together against the coalition of the Entente? It is perfectly obvious that not races but state organisations of definite groups of the bourgeoisie are conducting the struggle. It is also perfectly obvious that one or the other grouping of the great powers is determined, not by a community of certain racial tasks, but by a community of capitalist aims at a given moment. This is why the Serbs and Bulgarians, who only recently fought together against Turkey, have now split into hostile camps. This is why England, formerly an enemy of Russia, is now exercising hegemony over it. This is why Japan keeps step with the Russian bourgeoisie, although only ten years ago Japanese capital fought with arms in hand against Russian capital.2)

 

From a purely scientific, not falsified, point of view, the inadequacy of this theory is striking. Notwithstanding its obvious falsity, however, it is assiduously cultivated both in the press and in the universities, for the sole reason that it promises no mean advantages for Master Capital.3)In justice, however, we must note that, to the extent that the various "races" are being consolidated and united in the iron fist of the military state, there appears a less vulgar but no less untenable attempt to advance a territorial-psychological theory. The place of the "race" is here taken by its substitute, the "middle European," "American," or some other "humanity."4) This theory is also far from the truth, because it ignores the principal characteristic of modern society - its class structure, and because the class interests of the upper social strata are substituted for the so-called "general" interests of the "whole."

 

The second very widespread "theory" of imperialism defines it as the policy of conquest in general. From this point of view one can speak with equal right of Alexander the Macedonian's and the Spanish conquerors' imperialism, of the imperialism of Carthage and Ivan III, of ancient Rome and modern America, of Napoleon and Hindenburg.

 

Simple as this theory may be, it is absolutely untrue. It is untrue because it "explains" everything, i.e., it explains absolutely nothing.

 

Every policy of the ruling classes ("pure" policy, military policy, economic policy) has a perfectly definite functional significance. Growing out of the soil of a given system of production, it serves to reproduce given relations of production either simply or on an enlarged scale. The policy of the feudal rulers strengthens and widens feudal production relations. The policy of trade capital increases the sphere of domination of trade capitalism. The policy of finance capitalism reproduces the production basis of finance capital on a wider scale.

 

It is perfectly clear that the same thing can also be said about the war. War serves to reproduce definite relations of production. War of conquest serves to reproduce those relations on a wider scale. Simply to define war, however, as conquest is entirely insufficient, for the simple reason that in doing so we fail to indicate the main thing, namely, what production relations are strengthened or extended by the war, what basis is widened by a given "policy of conquest."5)

 

Bourgeois science does not see and does not wish to see this. It does not understand that a basis for the classification of various "policies" must exist in the social economy out of which the "policies" arise. Moreover, it is inclined to overlook the vast differences existing between various periods of economic development, and just at the present time, when all the peculiarities of the historical economic process of our days are so striking to the eye, the Austrian and Anglo-American economic school, the least historical of all, has built its nest in bourgeois economics.6) Publicists and scholars attempt to paint modern imperialism as something akin to the policies of the heroes of antiquity with their "imperium."

 

This is the "method" of bourgeois historians and economists. They gloss over the fundamental difference between the slaveholding system of "antiquity," with its embryo of trade capital and artisanship, and "modern capitalism." The aim in this case is quite clear. The futility of the ideas of labour democracy must be "proven" by placing it on a level with the Lumpenproletariat the workers and the artisans of antiquity.

 

From a purely scientific point of view all such theories are highly erroneous. If a certain phase of development is to be theoretically understood, it must be understood with all its peculiarities, its distinguishing trends, its specific characteristics, which it shares with none. He who, like "Colonel Torrence," sees in the savage's club the beginning of capital, he who, like the "Austrian" school of economics, defines capital as a means of production (which in essence is the same thing), will never be able to find his way among the tendencies of capitalist development and include them in one theoretical structure. The historian or economist who places under one denominator the structure of modern capitalism, i.e., modern production relations, and the numerous types of production relations that formerly led to wars of conquest, will understand nothing in the development of modern world economy. One must single out the specific elements which characterise our time, and analyse them. This was Marx's method, and this is how a Marxist must approach the analysis of imperialism.7)

 

We now understand that it is impossible to confine oneself to the analysis of the forms, in which a policy manifests itself; for instance, one cannot be satisfied with defining a policy as that of "conquest," "expansion," "violence," etc. One must analyse the basis on which it rises and which it serves to widen. We have defined imperialism as the policy of finance capital. Therewith we uncovered the functional significance of that policy. It upholds the structure of finance capital; it subjugates the world to the domination of finance capital; in place of the old pre-capitalist, or the old capitalist, production relations, it put the production relations of finance capital. Just as finance capitalism (which must not be confused with money capital, for finance capital is characterized by being simultaneously banking and industrial capital) is an historically limited epoch, confined only to the last few decades, so imperialism, as the policy of finance capital, is a specific historic category.

 

Imperialism is a policy of conquest. But not every policy of conquest is imperialism. Finance capital cannot pursue any other policy. This is why, when we speak of imperialism as the policy of finance capital, its conquest character is selfunderstood; at the same time, however, we point out what production relations are being reproduced by this policy of conquest. Moreover, this definition also includes a whole series of other historic trends and characteristics. Indeed, when we speak of finance capital, we imply highly developed economic organisms and, consequently, a certain scope and intensity of world relations; in a word, we imply the existence of a developed world economy; by the same token we imply a certain state of production relations, of organisational forms of the economic life, a certain interrelation of classes, and also a certain future of economic relations, etc., etc. Even the form and the means of struggle, the organisation of state power, the military technique, etc., are taken to be a more or less definite entity, whereas the formula "policy of conquest" is good for pirates, for caravan trade, and also for imperialism. In other words, the formula "policy of conquest," defines nothing, whereas the formula, "policy of conquest of finance capital," characterises imperialism as a definite historical entity.

 

From the fact that the epoch of finance capitalism is an historically limited phenomenon, it does not follow, of course, that it has stepped into the light of day like Deus ex machina. In reality it is an historic continuation of the epoch of industrial capitalism, just as the latter was a continuation of the phase of commercial capitalism. This is why the fundamental contradictions of capitalism which, in the course of its development, are continually being reproduced on a wider scale, find their sharpest expression in our own epoch. The same is true of the anarchic structure of capitalism, which finds its expression in competition. The anarchic character of capitalist society is expressed in the fact that social economy is not an organised collective body guided by a single will, but a system of economies interconnected through exchange, each of which produces at its own risk, never being in a position to adapt itself more or less to the volume of social demand and to the production carried on in other individual economies. This calls forth a struggle of the economies against each other, a war of capitalist competition. The forms of this competition can be widely different. The imperialist policy in particular is one of the forms of the competitive struggle. In the following chapter we intend to analyse it as a case of capitalist competition, namely, competition in the epoch of finance capital.

Reproduction of the Process of Concentration and Centralisation on a World Scale

Notes

 

1) We speak of imperialism mainly as of a policy of finance capital. However, one may also speak of imperialism as an ideology. In a similar way liberalism is on the one hand a policy of industrial capitalism (free trade, etc.), on the other hand it denotes a whole ideology (personal liberty, etc.).

 

2) The "racial theory" has been excellently ridiculed by Kautsky. See his: Rasse and Judentum, published during the war. [Published in English under the title Are the Jews a Race, 1926. Ed.]

 

3) "Scientific" literature of the war period abounds with monstrous examples of barbarous violations of the most elementary truths. All possible methods are being picked up to show the cultural bankruptcy and the inborn meanness of the enemy's "race" (minderwertige Nationen). A French magazine has published a so-called "investigation" earnestly proving to its readers that the German urine is one-third more poisonous than that of the Entente nations in general, that of the French in particular!

 

4) See F. Neumann: Mitteleuropa.

 

5) Clausewitz's declaration that war is a continuation of politics by other means, is well known. Politics itself, however, is an active "continuation" in space of a given mode of production.

 

6) It is curious to note that even such scientists as the Russian historian, R. Wipper, have an unusual liking for "modernising" events beyond all bounds, for obliterating all historical marks. This is no surprise, for in very recent times Wipper has revealed himself as an unbridled chauvinist calumniator, finding hospitality at Mr. Riabushinsky s [Riabushinsky was a prominent Russian manufacturer. Ed.]

 

7) The methodology of Marxian economics was brilliantly explained by Marx in his Einleitung zu einer Kritik der politischen Oekonomie, which was published by Kautsky as an appendix to the latest edition of Zur Kritik der politischen Oekonomie Stuttgart 1897. [In English translation: A Contribution to the Critique of Political Economy, Chicago, 1913. Ed.]

Reproduction of the Processes of Concentration and Centralization of Capital on a World Scale

The two most important processes of capitalist development are concentration and centralization of capital; they are often confused but must be clearly distinguished. This is how Marx defines these terms:

 Every individual capital [he says] is a larger or smaller concentration of the means of production, giving command over a larger or smaller army of workers. Every accumulation becomes the means of new accumulation. As the mass of wealth which functions as capital increases, there goes on an increasing concentration of that wealth in the hands of individual capitalists, with a resultant widening of the basis of large-scale production and of the specific methods of capitalist production. The growth of social capital is affected by the growth of many individual capitals.... Two points characterise this kind of concentration which is directly dependant upon accumulation, or, gather, identical with it [italics ours - N.B.]. First of all, the increasing concentration of the social means of production into the hands of individual capitals, is, other conditions being equal, restricted by the extent of social wealth. In the second place, the part of social capital domiciled in each particular sphere of production is divided among many capitalists, who face one another as independent commodity producers competing one with another.... This splitting up of social capital into a number of individual capitals, or the repulsion of its fragments one by another, [Marx here has in mind the division of property, etc. - N.B.], is counteracted by their attraction. The latter is not simply a concentration of the means of production and command over labour identical with accumulation. It is the concentration of already formed capitals, the destruction of their individual independence, the expropriation of capitalist by capitalist, the transformation of many small capitals into a few large ones. This process is distinguished from simple accumulation by this, that it involves nothing more than a change in the distribution of capitals that already exist and are already at work....Capital aggregates into great masses in one hand because, elsewhere, it is taken out of my hands. Here we have genuine centralization in contradistinction to accumulation and concentration.1)
 

 

To summarise. By concentration we understand the increase of capital that is due to the capitalisation of the surplus value produced by that capital; under centralization we understand the joining together of various individual capital units which thus form a new larger unit. Concentration and centralisation of capital pass through various phases of development, which we must now survey. Let us note in passing that both processes, concentration and centralization, influence one another. A great concentration of capital accelerates the absorption of small-scale enterprises by large-scale ones; conversely, centralization aids the increase of individual capital units and so accelerates the process of concentration.

 

The primary form in the process of concentration is concentration of capital in an individual enterprise. This form predominated up to the last quarter of the nineteenth century. The accumulation of social capital is here expressed in the accumulation of the capital of individual entrepreneurs who oppose one another as competitors. The development of joint stock companies, which made it possible to use the capital of a considerable number of individual entrepreneurs, and which radically undermined the principle of individual ownership of enterprises, created the prerequisites for large monopolistic associations of entrepreneurs. Concentration of capital assumed a new form here, namely, the form of concentration in trusts. Capital accumulation no more increased the capital of individual producers; it turned into a means of increasing the capital of entrepreneurs' organisations. The tempo of accumulation increased to an extraordinary degree. Huge masses of surplus value, far exceeding the needs of an insignificant group of capitalists, are converted into capital to begin a new cycle. But even here the development does not stop. The individual production branches are in various ways knit together into one collective body, organised on a large scale. Finance capital seizes the entire country in an iron grip. "National economy" turns into one gigantic combined trust whose partners are the financial groups and the state. Such formations we call state capitalist trusts. Of course, the latter formations cannot be identified with the structure of a trust in the proper sense of the word; a trust proper is a, much more centralized and less anarchic organisation. To a certain degree, however, particularly in comparison with the preceding phase of capitalism, the economically developed states have already advanced far towards a situation where they can be looked upon as big trust-like organisations or, as we have termed them, state capitalist trusts. We may, therefore, speak at present about the concentration of capital in state capitalist trusts as component parts of a much larger socio-economic entity, world economy.

 

It is true that the early economists already spoke of the "accumulation of capital in a country," this being one of the favourite subjects, as witnessed, for instance, by the title of Adam Smith's principal book. At that time, however, the expression had a considerably different meaning, for "national economy," or the "economy of a country" by no means represented a collective capitalist enterprise, a single gigantic combined trust-a form largely adopted at present by the foremost capitalist countries.

 

Parallel with the change in the forms of concentration went the change in the forms of centralisation. Where individual ownership of enterprises prevailed, individual capitalists opposed one another in the competitive struggle. At that time "national economy" and "world economy" were only sum totals of those comparatively small units that were interconnected by the circulation of commodities and competed with each other mainly within "national" limits. The centralisation process consisted in small capitalists being absorbed by large ones, in the growth of large-scale, individually owned, enterprises. With the growth of large-scale enterprises the extensive character of competition (within given territorial limits) decreased more and more; the number of competitors shrank with the growth of centralisation. On the other hand, the intensity of the competition increased tremendously, for the smaller number of larger enterprises began to place on the market volumes of commodities unknown in former times. Concentration and centralisation of capital finally brought about the formation of trusts. Competition rose to a still higher stage. Where formerly many individually owned enterprises competed with one another, there appeared the most stubborn competition between a few gigantic capitalist combines pursuing a complicated and, to a considerable degree, calculated policy. There finally comes a time when competition ceases in an entire branch of production. But the war for dividing up the surplus value between the syndicates of the various branches becomes fiercer; organisations producing manufactured goods arise against syndicates producing raw materials, and vice versa. The centralisation process proceeds apace. Combines in industry and banking syndicates unite the entire "national" production, which assumes the form of a company of companies, thus becoming a state capitalist trust. Competition reaches the highest, the last conceivable state of development. It is now the competition of state capitalist trusts in the world market. Competition is reduced to a minimum within the boundaries of "national" economies, only to flare up in colossal proportions, such as would net have been possible in any of the preceding historic epochs. Of course, there existed competition between "national economies," i.e., between their ruling classes, also in former times. That competition, however, was of an entirely different nature, for the inner structure of those "national economies" was entirely different. "National economy" did not appear on the arena of the world market as a homogeneous organised whole endowed with unusual economic strength; inside of it absolutely free competition reigned. On the other hand, competition in the world market was extremely weak. All this looks entirely different now in the epoch of finance capitalism, when the centre of gravity is shifted to the competition of gigantic, consolidated, and organised economic bodies possessed of a colossal fighting capacity in the world tournament of "nations." Here competition holds its orgies on the greatest possible scale, and together with this there goes on a change and a shift to a higher phase in the process of capital centralisation. The absorption of small capital units by large ones, the absorption of weak trusts, the absorption even of large trusts by larger ones is relegated to the rear, and looks like child's play compared with the absorption of whole countries that are being forcibly torn away from their economic centres and included in the economic system of the victorious "nation." Imperialist annexation is only a case of the general capitalist tendency towards centralisation of capital, a case of its centralisation on that maximum scale which corresponds to the competition of state capitalist trusts. The arena of this combat is world economy; its economic and political limits are a world trust, a single world state obedient to the finance capital of the victors who assimilate all the rest - an ideal of which even the hottest heads of former epochs never dreamed.

 

One may distinguish two kinds of centralisation: the one where an economic unit absorbs another unit of the same kind, and the one which we term vertical centralisation, where an economic unit absorbs another of a different kind. In the latter case we have "economic supplement" or combination. At present, when the competition and the centralisation of capital are being reproduced on a world scale, we find the same two types. When one country, one state capitalist trust, absorbs another, a weaker one possessed of comparatively the same economic structure, we have a horizontal centralisation of capital. Where, however, the state capitalist trust includes an economically supplementary unit, an agrarian country for instance, we have the formation of a combine. Substantially the same contradictions and the same moving forces are reflected here as within the limits of "national economies"; to be specific, the rise of prices of raw materials leads to the rise of combined enterprises. Thus on the higher stage of the struggle there is reproduced the same contradiction between the various branches, but on a considerably wider scale.

 

The actual process of development of modern world economy knows both these forms. An example of a horizontal imperialist annexation is the seizure of Belgium by Germany; an example of vertical annexation is the seizure of Egypt by England. None the less, it is customary to reduce imperialism to colonial conquests alone. This entirely erroneous conception formerly found some justification in the fact that the bourgeoisie, following the line of least resistance, tended to widen its territory by the seizure of free lands that offered little resistance. Now, however, the time has come for a fundamental redivision. Just as trusts competing with one another within the boundaries of a state first grow at the expense of "third persons," of outsiders, and only after having destroyed the intermediary groupings, thrust themselves against one another with particular ferocity, so the competitive struggle between state capitalist trusts first expresses itself in a struggle for free lands, for the jus primi occupantis, then it stages a redivision of colonies, and finally, when the struggle becomes more intense, even the territory of the home country is drawn into the process of redivision. Here, too, development proceeds along the line of least resistance, and the weakest state capitalist trusts first disappear from the face of the earth. This is the general law of capitalist production, which can fall only with the fall of capitalist production itself.

Notes

 

1) Capital, Vol, I, pp. 690-691.

Means of Competitive Struggle, and State Power
 

The growth of competition outlined in the last chapter reduces itself to the fact that the continuous elimination of competition among smaller economic units calls forth a sharper competition among large economic units. This process is accompanied by curious changes in the methods of struggle.

 

The struggle of individually owned enterprises is usually conducted by means of low prices; small shops sell cheaper, reducing their standards of living to a minimum; capitalists strive to reduce the production costs by improving technique and lowering wages, etc. When the struggle among individually owned enterprises has been replaced by the struggle among trusts, the methods of struggle (in so far as it is conducted in the world market) undergo a certain change; low prices disappear in the home market, being replaced by high prices which facilitate the struggle in the world market; the latter is conducted by means of low prices at the expense of the high prices paid in the home market. The importance of state power grows: tariff rates, freight rates are taken advantage of; the tremendous economic power of the trusts opposing one another, both in the domestic and in the foreign market, allows them, under certain conditions, also to apply other methods. When a trust represents a large combined enterprise, when, for instance, it owns railroads, steamboats, electric power, etc., thus forming a state within a state, it can pursue a very complicated policy in regard to its competitors by regulating railroad rates, water transport rates, by establishing prices for the use of electric power, etc., etc. Of still greater significance is the closing of an access to raw materials and to the sales market, as well as the refusal of credit. The road to raw materials is usually blocked where there is a combined cartel. 

 

Raw materials produced by enterprises belonging to the cartel are not sold to outsiders "as a matter of principle" (the so called ausschliesslicher Verbandsverkehr); as to the sales markets, here the organisations belonging to the cartel agree to buy nothing from outsiders; moreover, this, under the pressure of the cartel, is made binding also for "third persons" who usually buy from the cartel (for which they sometimes receive premiums, reductions, etc.). We must finally note a lowering of prices and selling at a loss to stifle the competitor. The trust here declares that "it does not wish to make profit on the enterprise itself, that the struggle is conducted only to defeat the competitor, and therefore without any relation to self-cost. The lower limit is formed, not by the production costs, but by the cartel's capital power and by the strength of its credit; the question thus reduces itself to how long its members will be able to stand a struggle which, for the time being, offers them no gain."1) In the home market this method is used to stamp out the final resistance of the opponent; in the foreign market it appears only as an increase of dumping. There are, however, still more striking examples of the struggle. We have in mind the struggle among the American trusts. The principles applied here went far beyond what is permissible in organised government: criminal gangs were hired to destroy railroad tracks, to damage and blow up oil pipes; incendiarism and murder were practiced; governmental authorities, including entire judicial bodies, were bribed on a large scale; spies were maintained in the camp of the competitors, etc., etc. - there is a plethora of material in this respect in the history of the giant American combines.2)

 

When competition has finally reached its highest stage, when it has become competition between state capitalist trusts, then the use of state power, and the possibilities connected with it, begin to play a very large part. The state apparatus has always served as a tool in the hands of the ruling classes of its country, and it has always acted as their "defender and protector" in the world market; at no time, however, did it have the colossal importance that it has in the epoch of finance capital and imperialist politics. With the formation of state capitalist trusts, competition is being almost entirely shifted to foreign countries; obviously, the organs of the struggle that is to be waged abroad, primarily state power, must therefore grow tremendously. The significance for capitalism of high tariffs, which increase the fighting capacity of the state capitalist trust in the world market, must increase still more; the various forms of "protecting national industry" become more pronounced; state orders are placed only with "national" firms; income is guaranteed to all sorts of enterprises, which present great risks but are "useful" from a social point of view; the activities of "foreigners" are hampered in various ways. (Compare, for instance, the stock exchange policy of the French government as mentioned in Chapter II). Whenever a question arises about changing commercial treaties, the state power of the contracting groups of capitalists appears on the scene, and the mutual relations of those states-reduced in the final analysis to the relations between their military forces-determine the treaty. When a loan is to be granted to one or the other country, the government, basing itself on military power, secures the highest possible rate of interest for its nationals, guarantees obligatory orders, stipulates concessions, struggles against foreign competitors. 

 

When the struggle begins for the exploitation by finance capital of a territory that has not been formally occupied by anybody, again the military power of the state decides who will possess that territory. In "peaceful" times the military state apparatus is hidden behind the scenes where it never stops functioning; in war times it appears on the scene most directly. The more strained the situation in the world sphere of struggle-and our epoch is characterised by the greatest intensity of competition between "national" groups of finance capital the oftener an appeal is made to the mailed fist of state power. The remnants of the old laissez faire, laissez passer ideology disappear, the epoch of the new "mercantilism," of imperialism, begins.

 

The tendency towards imperialism combines economic phenomena with a great political power. Everything is organised on a large scale. The free play of economic forces, not so long ago highly alluring to thinkers and men of affairs, dies out. There is an ebb and flow of migrating people everywhere, and that process is supervised by the state. The new economic and social forces require powerful protection both inside the country and outside of its frontiers; for this purpose the state creates new organs, great numbers of officials and institutions. State activities are everywhere enlarged by new functions. Its influence over the facts of home life and over foreign relations becomes more multifarious. The government would not decline directly to look after the interests of its people [the term "people" must, of course, be understood conditionally when reading bourgeois economists - N.B.] at whatever point of the globe the interests may appear. National economy and politics are most closely interlocked. The breach between this epoch and the epoch of old liberalism, with its advocacy of free play, with its doctrine of the harmony of interests, becomes ever wider. This makes one think that there is more cruelty and pugnacity in the world as a whole. The world is more united than ever: everything is contiguous to everything, everything is influenced by everything, at the same time everybody jostles against everybody else, and deals blows right and left.3)

 

If state power is generally growing in significance, the growth of its military organisation, the army and the navy, is particularly striking. The struggle between state capitalist trusts is decided in the first place by the relation between their military forces, for the military power of the country is the last resort of the struggling "national" groups of capitalists. The immensely growing state budget devotes an ever larger share to "defence purposes," as militarisation is euphemistically termed.

 

The following table illustrates the monstrous growth of military expenditures and their share in the state budget.

Cost of Army and NavyStates Years Military expenditures per capita of the population All state expenditures per capita of the population Percentage of military expenditures in relation to all expenditures Years Military expenditures per capita of the population All state expenditures per capita of the population Percentage of military expenditures in relation to all expenditures

England 1875 16.10 41.67 38.06 1907-08 26.42 54.83 48.06

France 1875 15.23 52.71 29.0 1908 24.81 67.04 37.0

Austria-Hungary 1873 5.92 22.05 26.8 1908 8.49 37.01 22.8

Italy 1874 6.02 31.44 19.1 1907-08 9.53 33.24 28.7

Russia 1877 5.24 15.14 34.6 1908 7.42 20.81 35.6

Japan 1875 0.60 3.48 17.2 1908 4.53 18.08 25.1

Germany 1881-82 9.43 33.07 28.5 1908 18.44 65.22 28.3

United States of America 1875 10.02 29.89 33.5 1907-08 16.68 29.32 56.9 4)

 

The present military budgets are expressed in the following figures: the United States (1914), $173,522,804 for the army and $139,682,186 for the navy, total $313,204,990; France (1913), 983,224,376 francs for the army and 467,176,109 francs for the navy, total 1,450,400,485 francs (in 1914, 1,717,202,233 francs); Russia (1913, counting only ordinary expenditures), 581,099,921 rubles for the army and 244,846,500 rubles for the navy, total 825,946,421 rubles; Great Britain (1913-14) 28,220,000 pounds for the army and 48,809,300 pounds for the navy, total 77,029,300 pounds; Germany (1913, both ordinary and extraordinary expenditure), 97,845,960 pounds sterling, etc.5)

 

We are now passing through a period when armaments on land, on water, and in the air are growing with feverish rapidity. Every improvement in military technique entails a reorganisation and reconstruction of the military mechanism; every innovation, every expansion of the military power of one state stimulates all the others. What we observe here is like the phenomenon we come across in the sphere of tariff policies where a raise of rates in one state is immediately reflected in all others, causing a general raise. Of course, here, too, we have before us only a case of a general principle of competition, for the military power of the state capitalist trust is the weapon to be used in its economic struggle. The growth of armaments, creating as it does a demand for the products of the metallurgic industry, raises substantially the importance of heavy industry, particularly the importance of "cannon kings" à la Krupp. To say, however, that wars are caused by the ammunition industry,6) would be a cheap assertion. The ammunition industry is by no means a branch of production existing for itself, it is not an artificially created evil which in turn calls forth the "battle of nations." It ought to be obvious from the foregoing considerations that armaments are an indispensable attribute of state power, an attribute that has a very definite function in the struggle among state capitalist trusts. Capitalist society is unthinkable without armaments, as it is unthinkable without wars. And just as it is true that not low prices cause competition but, on the contrary, competition causes low prices, it is equally true that not the existence of arms is the prime cause and the moving force in wars (although wars are obviously impossible without arms) but, on the contrary, the inevitableness of economic conflicts conditions the existence of arms. This is why in our times, when economic conflicts have reached an unusual degree of intensity, we are witnessing a mad orgy of armaments. Thus the rule of finance capital implies both imperialism and militarism. In this sense militarism is no less a typical historic phenomenon than finance capital itself.

 

With the growth of the importance of state power, its inner structure also changes. The state becomes more than ever before an "executive committee of the ruling classes." It is true that state power always reflected the interests of the "upper strata," 7) but inasmuch as the top layer itself was a more or less amorphous mass, the organised state apparatus faced an unorganised class (or classes) whose interests it embodied. Matters are totally different now. The state apparatus not only embodies the interests of the ruling classes in general, but also their collectively expressed will. It faces no more atomised members of the ruling classes, but their organisations. Thus the government is de facto transformed into a "committee" elected by the representatives of entrepreneurs' organisations, and it becomes the highest guiding force of the state capitalist trust. This is one of the main causes of the socalled crises of parliamentarism. In former times parliament served as an arena for the struggle among various factions of the ruling groups (bourgeoisie and landowners, various strata of the bourgeoisie among themselves, etc.). Finance capital has consolidated almost all of their varieties into one "solid reactionary mass" united in many centralised organisations. "Democratic" and "liberal" sentiments are replaced by open monarchist tendencies in modern imperialism, which is always in need of a state dictatorship. Parliament at present serves more as a decorative institution; it passes upon decisions prepared beforehand in the businessmen's organisations and gives only formal sanction to the collective will of the consolidated bourgeoisie as a whole. A "strong power" has become the ideal of the modern bourgeois. These sentiments are not "remnants of feudalism," as some observers suppose, these are not débris of the old that have survived in our times. This is an entirely new sociopolitical formation caused by the growth of finance capital. If the old feudal "policy of blood and iron" was able to serve here, externally, as a model, this was possible only because the moving springs of modern economic life drive capital along the road of aggressive politics and the militarisation of all social life. The best proof may be found not only in the foreign policies of such "democratic" countries as England, France, Belgium (note the colonial policy of Belgium), and the United States, but also in the changes that take place in their internal policies (militarisation and the growth of monarchism in France, the increasing attempts at attacking the freedom of labour organisations in all countries, etc., etc.).

 

Being a very large shareholder in the state capitalist trust, the modern state is the highest and all-embracing organisational culmination of the latter. Hence its colossal, almost monstrous, power.

Notes

 

1) Fritz Kestner: Der Organisationszwang. Eine Untersuchung über die Kämpfe zwischen den Kartellen and Aussenseitern, Berlin, 1912. Commenting on Kestner is Hilferding's article, "Organisationsmacht and Staatsgewalt," in the Neue Zeit, 32, 2.

 

2) Cf. Gustavus Myers: History of the Great American Fortunes, Chicago, 1909

 

3) Prof. Isayev, l.c., pp. 261-262.

 

4) O. Schwarz: "Finanzen der Gegenwart," in Handwörterbuch der Staatswissenschaften. It must be noted that the author's figures of German and Austrian expenditures are incorrect, for they do not include the extraordinary budgets and the appropriations made only once; the figures for the U.S.A. do not include the "civil expenditure" of the individual states, so that the increase (335-569) is in reality much larger.

 

5) We quote from The Statesman's Yearbook for 1915.

 

6) Cf. the above mentioned book by Pavlovich. A more shallow variety of this theory is advanced by Kautsky when he asserts (in his Nationalstaat, imperialistischer Staat and Staatenbund, also in numerous articles in the Neue Zeit during the was) that the war was caused-by mobilisation. This is, indeed, putting things on their heads.

 

7) This is recognised also by a few burgeois sociologists and economists. Franz Oppenheimer, for instance, views the state as the organisation of the classes that own the means of production (in the first place the land) utilised to exploit the masses of the people. His formula to a certain degree approaches the Marxian theory-with modifications that impair its value (placing the emphasis on the "land," etc.). It is a curious incident that in polemic notes against Oppenheimer such an authority of German sociology and economics as Adolf Wagner admits to a large extent the correctne