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Basic Economic Law of Monopoly Capitalism - Transition to ImperialismOstrovityanov K.V. Shepilov D.T. Leontiev L.A. , Laptev I.D. Kuzminov I.I. Gatovsky L.M
State publishing house of political literature. Moscow. 1954
The historical place of imperialism
Imperialism is the last stage of capitalism.
Determining the historical place of imperialism in relation to capitalism in general, Lenin wrote: “Imperialism is a special historical stage of capitalism. This feature is threefold: imperialism is (1) monopoly capitalism; (2) parasitic or decaying capitalism; (3) – dying capitalism” [1] .
Monopoly capitalism does not and cannot eliminate the foundations of the old capitalism. It is in a sense a superstructure over the old, pre‐monopoly capitalism, which is everywhere combined with pre‐capitalist forms of economy. Just as there is not and cannot be ʺpure capitalismʺ, the existence of ʺpure imperialismʺ is inconceivable. Even in the most developed countries, along with monopolies, there are many small and medium‐sized enterprises, especially in light industry, agriculture, trade, and other branches of the economy. In almost all capitalist countries, a significant part of the population is made up of the peasantry, which for the most part leads a simple commodity economy. The vast majority of mankind lives in colonial and semi‐colonial countries, where imperialist oppression is intertwined with pre‐capitalist, especially feudal, forms of exploitation.
An essential feature of imperialism is that monopolies exist side by side with exchange, the market, competition, and crises. It follows from this that at the monopoly stage of capitalism, the economic laws of capitalism in general remain in full force, but their actions are determined by the basic economic law of modern capitalism ‐ the law of ensuring the maximum capitalist profit. Therefore, they act with increased destructive power. This is how matters stand with the laws of value and surplus value, with the law of competition and anarchy of production, with the general law of capitalist accumulation, which causes the relative and absolute impoverishment of the working class and dooms the bulk of the working peasantry to impoverishment and ruin, with the contradictions of capitalist reproduction, economic crises.
The monopolies bring the socialization of production to the limit possible under capitalism. Large and largest enterprises, each employing thousands of people, produce a significant proportion of all products in the most important industries. The monopolies tie gigantic enterprises together, take into account markets, sources of raw materials, seize scientific personnel, inventions, and improvements. The big banks control almost all of the countryʹs money. The ties between the various sectors of the economy and their interdependence are growing enormously. Industry, possessing gigantic production capacities, is capable of rapidly increasing the mass of goods produced.
At the same time, the means of production remain the private property of the capitalists. The decisive part of the means of production is at the disposal of the monopolies. In the pursuit of maximum profit, the monopolies in every way increase the degree of exploitation of the working class, which leads to a sharp increase in the impoverishment of the working masses and a decrease in their purchasing power.
Thus, the domination of monopolies to the greatest extent exacerbates the basic contradiction of capitalism—the contradiction between the social character of production and the private capitalist form of appropriation of the results of production. It is becoming more and more apparent that the social character of the production process requires social ownership of the means of production.
In the era of imperialism, the productive forces of society have reached such a level of development that they do not fit within the narrow framework of capitalist production relations. Capitalism, which replaced feudalism as a more progressive mode of production, turned into a reactionary force at the imperialist stage, hindering the development of human society. The economic law of the obligatory correspondence of production relations to the nature of the productive forces requires the replacement of capitalist production relations by new, socialist ones. This law meets with the strongest opposition from the ruling classes, and above all from the monopoly bourgeoisie and big landowners, who seek to prevent the working class from forming an alliance with the peasantry and overthrowing the bourgeois system.
The high level of development of the productive forces and the socialization of production, the extreme aggravation of all the contradictions of bourgeois society testify to the fact that capitalism, having entered the last stage of its development, is fully ripe for its replacement by the highest social system ‐ socialism.
Imperialism is parasitic or decaying capitalism.
Imperialism is parasitic or decaying capitalism. The tendency to stagnation and decay is inevitably generated by the dominance of monopolies, striving to obtain maximum profits. Monopolies, insofar as they are able to dictate prices in the market and artificially maintain them at a high level, are by no means always interested in applying technical innovations. Monopolies often hinder technical progress; they keep under wraps the largest scientific discoveries and technical inventions for years.
Thus, monopolies tend to stagnate and decay, and under certain conditions this tendency prevails. This circumstance, however, by no means ruled out the relatively rapid growth of capitalism before the Second World War. But this growth was extremely uneven, falling further and further behind the enormous possibilities opened up by modern science and technology.
Modern highly developed technology puts forward grandiose tasks, the fulfillment of which is beyond the capacity of decaying capitalism. Not a single capitalist country, for example, can make extensive use of its hydropower resources because of the obstacles posed by private ownership of land and the dominance of monopolies. The capitalist countries are not in a position to use the possibilities of modern science and technology to carry out extensive work to improve soil fertility. The interests of the capitalist monopolies hinder the use of atomic energy for peaceful purposes.
“Wherever you turn,” V. I. Lenin wrote back in 1913, “at every step you meet tasks that humanity is quite capable of solving immediately, capitalism prevents. He accumulated heaps of wealth ‐ and made people slaves of this wealth. He solved the most difficult problems of technology ‐ and stalled the implementation of technical improvements because of the poverty and ignorance of millions of the population, because of the stupid stinginess of a handful of millionaires ” [2] .
The decay of capitalism is expressed in the growth of parasitism. The capitalist class loses all connection with the production process. The management of enterprises is concentrated in the hands of hired technical personnel. The overwhelming majority of the bourgeoisie and landlords are turning into rentiers ‐ people who own securities and live on the income from these securities (coupon clipping). The parasitic consumption of the exploiting classes is growing.
The complete isolation of the rentier stratum from production is further intensified by the export of capital and income from foreign investment. The export of capital leaves the mark of parasitism on the whole country, which lives by the exploitation of the peoples of other countries and colonies. The capital exported abroad constitutes an ever‐increasing share of the national wealth of the imperialist countries, and the income from these capitals constitutes an ever‐increasing part of the income of the capitalist class. Lenin called the export of capital parasitism squared.
The capital placed abroad in 1929 was in relation to the national wealth: in England ‐ 18%, in France ‐ 15%, in Holland ‐ about 20%, in Belgium and Switzerland ‐ 12% each. In 1929, the income from capital invested abroad exceeded the income from foreign trade: in England ‐ more than 7 times, in the United
States ‐ 5 times.
In the United States of America, the income of rentiers from securities in 1913 amounted to 1.8 billion dollars, and in 1931 ‐ 8.1 billion dollars, which is 1.4 times the entire gross cash income of 30 million farming population in the same year. The USA is a country where the parasitic features of modern capitalism, as well as the predatory nature of imperialism, are most pronounced.
The parasitic character of capitalism is clearly manifested in the fact that a number of bourgeois countries are turning into rentier states. By means of enslaving loans, the largest imperialist countries extract huge profits from the debtor countries and subjugate them economically and politically. The rentier state is the state of parasitic, decaying capitalism. The exploitation of the colonies and dependent countries, which is one of the main sources of the maximum profits of the monopolies, turns a handful of the richest capitalist countries into parasites on the body of the rest of mankind.
The parasitic character of capitalism finds its expression in the growth of militarism. An ever‐increasing share of the national income, and chiefly the income of the working people, is taken into the state budget and spent on the upkeep of huge armies, on the preparation and conduct of imperialist wars. Being one of the most important methods of ensuring maximum profits for the monopolies, the militarization of the economy and imperialist wars mean at the same time the rapacious destruction of many human lives and enormous material values.
The intensification of parasitism is inextricably linked with the fact that gigantic masses of people are torn away from socially useful labor. The army of the unemployed is growing, the number of people employed in the service of the exploiting classes in the state apparatus, as well as in the incredibly swollen sphere of circulation, is increasing.
The decay of capitalism is further manifested in the fact that the imperialist bourgeoisie, using its profits from the exploitation of the colonies and dependent countries, systematically bribes, through higher wages and other handouts, a small elite of skilled workers ‐ the so‐called labor aristocracy. With the support of the bourgeoisie, the labor aristocracy seizes command posts in the trade unions; along with the pettybourgeois elements, it constitutes the active core of right‐wing socialist parties and poses a serious danger to the working‐class movement. This stratum of bourgeois workers is the social basis of opportunism.
Opportunism in the labor movement is the adaptation of the labor movement to the interests of the bourgeoisie by undermining the revolutionary struggle of the proletariat for liberation from capitalist slavery. The opportunists poison the consciousness of the workers by preaching the reformist way of ʺimprovingʺ capitalism, they demand from the workers the support of the bourgeois governments in all their domestic and foreign imperialist policies.
The opportunists are bourgeois agents in the labor movement. By splitting the ranks of the working class, the opportunists prevent the workers from joining forces to overthrow capitalism. This is one of the most important reasons why the bourgeoisie is still in power in many countries.
Pre‐monopoly capitalism, with its free competition, was matched by limited bourgeois democracy. Imperialism, with its domination of monopolies, is characterized by a turn from democracy to political reaction in the domestic and foreign policy of the bourgeois states. Political reaction along the whole line is a property of imperialism. The leaders of the monopolies or their henchmen occupy the most important posts in the governments and in the entire state apparatus. Under imperialism, governments are not set up by the people, but by the magnates of finance capital.
The reactionary monopoly cliques, in order to consolidate their power, seek to nullify the democratic rights of the working people won by the stubborn struggle of many generations. This makes it necessary to intensify in every possible way the struggle of the masses for democracy, against imperialism and reaction. “Capitalism in general and imperialism in particular turns democracy into an illusion – and at the same time, capitalism gives rise to democratic aspirations among the masses, creates democratic institutions, sharpens the antagonism between imperialism that denies democracy and the masses striving for democracy”[3].
In the epoch of imperialism, the struggle of the broad masses of the people, led by the working class, against the reaction engendered by the monopolies is of great historical significance. It is precisely on the activity, organization, and determination of the masses that the misanthropic plans of the aggressive forces of imperialism depend, which are constantly preparing new hard trials and military catastrophes.
Imperialism is the eve of the socialist revolution.
Imperialism is dying capitalism. The action of the basic economic law of modern capitalism sharpens all the contradictions of capitalism, brings them to the last line, to the extreme limits beyond which the revolution begins. The most important of these contradictions are the following three contradictions.
First, the contradiction between labor and capital. The domination of the monopolies and the financial oligarchy in the capitalist countries leads to intensified exploitation of the working classes. The sharp deterioration in the material situation and the intensification of the political oppression of the working class cause the growth of its indignation and lead to an intensification of the class struggle between the proletariat and the bourgeoisie. Under these conditions, the former methods of the economic and parliamentary struggle of the working class turn out to be completely inadequate. Imperialism is leading the working class to the socialist revolution as the only salvation.
Secondly, the contradiction between the imperialist powers. In the struggle for maximum profits, the monopolies of various countries clash, and each of the groups of capitalists seeks to secure predominance for itself by capturing sales markets, sources of raw materials, and spheres of investment of capital. The bitter struggle among the imperialist countries for spheres of influence inevitably leads to imperialist wars, which weaken the position of capitalism in general and advance the socialist revolution.
Thirdly, the contradiction between the oppressed peoples of the colonies and dependent countries and the imperialist powers that exploit them. As a result of the development of capitalism in the colonies and semi‐colonies, the national liberation movement against imperialism is intensifying. The colonies and dependent countries are being transformed from reserves of imperialism into reserves of the proletarian revolution.
These main contradictions characterize imperialism as dying capitalism. This does not mean that capitalism can die out on its own, in the order of ʺautomatic collapseʺ, without the most resolute struggle of the popular masses, led by the working class, to abolish the rule of the bourgeoisie. It only means that imperialism is that stage in the development of capitalism at which the proletarian revolution has become a practical inevitability and favorable conditions have ripened for a direct assault on the strongholds of capitalism. Therefore, Lenin characterized imperialism as the eve of the socialist revolution.
State monopoly capitalism.
In the era of imperialism, the bourgeois state, representing the dictatorship of the financial oligarchy, carries out all its activities in the interests of the ruling monopolies.
As the contradictions of imperialism sharpen, the ruling monopolies strengthen their direct leadership of the state apparatus. Increasingly, the largest magnates of capital are personally acting as heads of the state apparatus. There is a process of transformation of monopoly capitalism into statemonopoly capitalism. Already the First World War accelerated and intensified this process tremendously.
State‐monopoly capitalism consists in subordinating the state apparatus to capitalist monopolies and using it to interfere in the countryʹs economy (especially in connection with its militarization) in order to ensure maximum profits for the monopolies and strengthen the omnipotence of finance capital. At the same time, individual enterprises, industries, and economic functions are transferred into the hands of the state (providing a workforce, supplying scarce raw materials, a rationing system for distributing products, building military enterprises, financing the militarization of the economy, etc.) while maintaining the dominance of private ownership of the means of production in the country.
The monopolies use state power to actively promote the concentration and centralization of capital, to increase the power and influence of the largest monopolies: the state, by special measures, compels independent entrepreneurs to submit to monopoly associations, and in time of war it carries out a forced concentration of production, closing many small and medium‐sized enterprises. In the interests of the monopolies, the state, on the one hand, establishes high customs duties on imported goods, and on the other hand, encourages the export of goods by paying export duties to the monopolies and making it easier for them to conquer new markets through dumping.
The monopolies use the state budget to rob the population of their country through taxes and receive orders from the state that bring huge profits. The bourgeois state, under the pretext of ʺencouraging economic initiative,ʺ pays huge sums of money to the largest entrepreneurs in the form of subsidies. If the monopolies are threatened with bankruptcy, they receive funds from the state to cover their losses, and their tax debts to the state are written off.
The development of state‐monopoly capitalism is particularly enhanced during the period of preparation and conduct of imperialist wars. Lenin called state‐monopoly capitalism hard labor for the workers, a paradise for the capitalists. The governments of the imperialist countries give huge orders to the monopolies for the supply of armaments, equipment, and foodstuffs, build military factories at the expense of the treasury and put them at the disposal of the monopolies, and issue war loans. At the same time, the bourgeois states shift all the burdens of war onto the working people. All this provides the monopolies with enormous profits.
The development of state‐monopoly capitalism leads, firstly, to a further acceleration of the capitalist socialization of production, which creates the material preconditions for the replacement of capitalism by socialism. Lenin pointed out that state‐monopoly capitalism is the most complete material preparation for socialism.
The development of state‐monopoly capitalism leads, secondly, to the intensification of the relative and absolute impoverishment of the proletariat. With the help of state power, the monopolies in every possible way increase the degree of exploitation of the working class, the peasantry, and broad sections of the intelligentsia, which inevitably causes a sharp aggravation of the contradictions between the exploited and the exploiters, and intensifies the struggle of the proletariat and other sections of the working people for the abolition of capitalism.
The defenders of capitalism, concealing the subordination of the bourgeois state to the capitalist monopolies, assert that the state has become the decisive force in the economy of the capitalist countries and is capable of ensuring planned management of the national economy. In reality, however, the bourgeois state cannot manage the economy in a planned manner, since the economy is not at its disposal, but in the hands of the monopolies. All attempts at state ʺregulationʺ of the economy under capitalism are powerless in the face of the spontaneous laws of economic life.
The law of uneven economic and political development of the capitalist countries in the period of imperialism and the possibility of the victory of socialism in one country.
Under capitalism, individual enterprises and branches of the countryʹs economy cannot develop evenly. In conditions of competition and anarchy of production, uneven development of the capitalist economy is inevitable. But in the pre‐monopoly era, capitalism as a whole was still on the rise. Production was fragmented among a large number of enterprises, free competition reigned, there were no monopolies. Capitalism could still develop relatively smoothly. Some countries outperformed others for a long period of time. On the globe then there were vast, unoccupied territories. The case did without military clashes on a global scale.
The situation changed radically with the transition to monopoly capitalism. The high level of technological development opened up the opportunity for young countries to quickly, in leaps and bounds, overtake and outstrip older rivals. Countries that have embarked on the path of capitalist development later than others use the ready‐made results of technical progress ‐ machines, methods of production, etc.
On the other hand, in old countries earlier than in young ones, the domination of monopolies has developed, which are characterized by a tendency to parasitism, decay, stagnation of technology. Hence the fast, abrupt development of some countries, growth retardation of others. This spasmodic development is also greatly intensified by the export of capital. An opportunity is being created for some countries to overtake other countries, to force them out of the markets, to achieve a redistribution of the already divided world with an armed hand. During the period of imperialism, the uneven development of the capitalist countries became the decisive force in imperialist development.
The correlation of the economic forces of the imperialist powers is changing with unprecedented rapidity. The growth of the military forces of the imperialist states is also uneven. The changed balance of economic and military forces inevitably clashes with the old distribution of colonies and spheres of influence. A struggle for the redistribution of the already divided world is brewing. The real might of one imperialist group or another is tested by means of bloody and devastating wars.
In 1860, England occupied the first place in world industrial production; France followed suit. Germany and the United States of America were just emerging on the world stage. A decade has passed, and the rapidly growing country of young capitalism ‐ the United States of America ‐ has overtaken France and switched places with it. A decade later, the United States of America overtook England and firmly took first place in world industrial production, and Germany overtook France and took third place after the USA and England. By the beginning of the 20th century, Germany had pushed aside England, taking second place after the United States. As a result of changes in the correlation of forces among the capitalist countries, the capitalist world splits into two hostile imperialist camps and world wars arise.
Due to the uneven development of the capitalist countries during the period of imperialism, world capitalism cannot develop otherwise than through crises and military catastrophes. The aggravation of contradictions in the camp of imperialism and the inevitability of military clashes lead to the mutual weakening of the imperialists. The world front of imperialism becomes easily vulnerable to the proletarian revolution. On this basis, a breakthrough of the front can take place at the link where the chain of the imperialist front is weakest, at the point where the most favorable conditions for the victory of the proletariat are formed.
The unevenness of economic development in the era of imperialism also determines the unevenness of political development, which means that the political prerequisites for the victory of the proletarian revolution in different countries mature at different times. These prerequisites include, above all, the sharpness of class contradictions and the degree of development of the class struggle, the level of class consciousness, political organization and revolutionary determination of the proletariat, its ability to lead the bulk of the peasantry.
The law of the uneven economic and political development of the capitalist countries during the period of imperialism constitutes the starting point of Leninʹs teaching on the possibility of the victory of socialism initially in several countries or even in one country taken separately.
Marx and Engels in the middle of the 19th century, studying pre‐monopoly capitalism, came to the conclusion that the socialist revolution can win only simultaneously in all or most of the civilized countries. However, at the beginning of the 20th century, especially during the First World War, the situation changed radically. Pre‐monopoly capitalism has grown into monopoly capitalism. Ascending capitalism has turned into descending, dying capitalism. The war exposed the incurable weaknesses of the world imperialist front. At the same time, the law of uneven development predetermined the different timing of the maturation of the proletarian revolution in different countries. Proceeding from the law of the uneven development of capitalism in the era of imperialism, Lenin came to the conclusion that the old formula of Marx and Engels no longer corresponds to the new historical conditions,
“The unevenness of economic and political development,” wrote Lenin, “is the unconditional law of capitalism. It follows from this that the victory of socialism is possible initially in a few or even in one, taken separately, capitalist country .”
This was a new, complete theory of the socialist revolution created by Lenin. It enriched Marxism and moved it forward, opened up a revolutionary perspective to the proletarians of individual countries, unleashed the initiative in attacking their own bourgeoisie, strengthened their faith in the victory of the proletarian revolution.
During the period of imperialism, the formation of the capitalist system of the world economy is completed, in connection with which individual countries have become links in a single chain.
Leninism teaches that under conditions of imperialism the socialist revolution first wins not necessarily in those countries where capitalism is most developed and the proletariat constitutes the majority of the population, but above all in those countries which are a weak link in the chain of world imperialism. The objective conditions for a socialist revolution have matured in the entire system of the world capitalist economy. Under such conditions, the presence in this system of countries that are insufficiently developed industrially cannot serve as an obstacle to revolution. The victory of the socialist revolution requires the presence of a revolutionary proletariat and a proletarian vanguard united in a political party,
In the era of imperialism, when the revolutionary movement is growing all over the world, the imperialist bourgeoisie enters into alliance with all reactionary forces without exception and makes every possible use of the survivals of serfdom to increase profits. Because of this, the liquidation of the feudal‐serf system is impossible without a determined struggle against imperialism. Under these conditions, the proletariat becomes the hegemon of the bourgeois‐democratic revolution, rallying the masses of the peasantry around itself to fight against serfdom and imperialist colonial oppression. As the anti‐feudal and national liberation tasks are solved, the bourgeoisdemocratic revolution develops into a socialist revolution.
During the period of imperialism, the indignation of the proletariat grows in the capitalist countries, elements of a revolutionary explosion accumulate, and a liberation war against imperialism develops in the colonial and dependent countries. Imperialist wars for the redivision of the world weaken the system of imperialism and intensify the tendency to unite the proletarian revolutions in the capitalist countries with the national liberation movement in the colonies.
The proletarian revolution, victorious in one country, is at the same time the beginning of the world socialist revolution and a powerful base for its further development. Lenin scientifically foresaw that the world revolution would develop through the revolutionary falling away of a number of new countries from the system of imperialism with the support given to the proletarians of these countries by the proletariat of the imperialist states. The very process of falling away from imperialism in a number of new countries will proceed the faster and more thoroughly, the more thoroughly socialism is strengthened in the first country of the victorious proletarian revolution.
“The outcome of the struggle,” Lenin wrote in 1923, “depends, in the final analysis, on the fact that Russia, India, China, etc. constitute the vast majority of the population. And it is precisely this majority of the population that has been drawn with extraordinary rapidity in recent years into the struggle for its liberation, so that in this sense there can be no shadow of doubt as to what the final solution of the world struggle will be.
In this sense, the final victory of socialism is completely and unconditionally assured” [5] .
SUMMARY
1. Imperialism is a special and final stage of capitalism. Imperialism is: 1) monopoly capitalism, 2) decaying or parasitic capitalism, 3) dying capitalism, on the eve of the socialist revolution.
2. The decay and parasitism of capitalism is expressed in the retardation by the monopolies of technical progress and the growth of productive forces, in the transformation of a number of bourgeois countries into rentier states living off the exploitation of the peoples of the colonies and dependent countries, in rampant militarism, in the growth of the parasitic consumption of the bourgeoisie, in a reactionary domestic and the foreign policy of the imperialist states, in the bribery of the bourgeoisie of the imperialist countries of the small top of the working class. The decay of capitalism sharply increases the impoverishment of the working class and the working masses of the peasantry.
3. As a result of the operation of the basic economic law of modern capitalism, the three main contradictions of imperialism are sharply exacerbated: 1) the contradiction between labor and capital, 2) the contradiction between the imperialist powers fighting for predominance, in the final analysis, for world domination, and 3) the contradiction between metropolises and colonies. Imperialism is bringing the proletariat close to the socialist revolution.
4. State‐monopoly capitalism is the subordination of the state apparatus to capitalist monopolies in order to ensure maximum profits and strengthen the dominance of the financial oligarchy. Meaning the highest stage of the capitalist socialization of production, state‐monopoly capitalism brings with it a further intensification of the exploitation of the working class, the impoverishment and ruin of the broad working masses.
5. The law of uneven economic and political development of the capitalist countries during the period of imperialism weakens the united front of world imperialism. The uneven maturation of the revolution excludes the possibility of a simultaneous victory of socialism in all countries or in most countries. It creates the possibility of breaking through the imperialist chain at its weakest link, the possibility of the victory of the socialist revolution initially in a few or even in one country taken separately.
[1] V. I. Lenin, Imperialism and the split of socialism, Works, vol. 23, p. 94.
[2] V. I. Lenin, Civilized barbarism, Works, vol. 19, p. 349.
[3] V. I. Lenin, Works, vol. 23, p. 13.
[4] V. I. Lenin, On the slogan of the United States of Europe,
Works, vol. 21, p. 311.
[5] V. I. Lenin, Better less, but better, Works, vol. 33, p. 458.