Basic Economic Law of Monopoly Capitalism - Transition to Imperialism

Ostrovityanov 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

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Transition to imperialism.

Pre‐monopoly capitalism with the dominance of free competition reached its highest point of development by the 1960s and 1970s. During the last third of the 19th century, the transition from pre‐monopoly capitalism to monopoly capitalism took place. In the late 19th and early 20th centuries, monopoly capitalism finally took shape.

Monopoly capitalism, or imperialism, is the highest and last stage of capitalism, the main distinguishing feature of which is the replacement of free competition by the rule of monopolies. The transition from pre‐monopoly capitalism to monopoly capitalism ‐ imperialism ‐ was prepared by the entire process of development of the productive forces and production relations of bourgeois society.

The last third of the 19th century was marked by major technical shifts, the growth of industry and its concentration. In metallurgy, new methods of steel smelting (Bessemer, Tomas, open‐hearth) have been widely used. The rapid spread of new types of engines ‐ dynamo, internal combustion engine, steam turbine, electric motor ‐ accelerated the development of industry and transport. Advances in science and technology opened up the possibility of producing electrical energy on a mass scale at thermal and then at large hydroelectric power stations. The use of electrical energy led to the creation of a number of new branches of the chemical industry, metallurgy of non‐ferrous and light metals. The use of chemical methods in many industries has expanded.

As early as the middle of the 19th century, light industry occupied a predominant place in the industry of the capitalist countries. Numerous enterprises of relatively small size belonged to individual owners; the proportion of joint‐stock companies was relatively small. The economic crisis of 1873 brought many such enterprises to ruin and gave a strong impetus to the concentration and centralization of capital. The predominant role in the industry of the main capitalist countries began to be played by heavy industry, primarily metallurgy and machine building, as well as mining, the development of which required enormous capital. The widespread use of joint‐stock companies further strengthened the centralization of capital.

The volume of world industrial output tripled between 1870 and 1900. World steel production increased from 0.5 million tons in 1870 to 28 million tons in 1900, and world pig iron production from 12.2 million tons to 40.7 million tons. The development of energy, metallurgy and chemistry led to an increase in world coal production (from 218 million tons in 1870 to 769 million tons in 1900) and oil (from 0.8 million tons to 20 million tons). The growth of industrial production was closely linked with the development of rail transport. In 1835, 10 years after the construction of the first railway, there were 2.4 thousand kilometers of railway tracks all over the world, in 1870 ‐ over 200 thousand, and in 1900 ‐ 790 thousand kilometers. Sea routes began to be served by large ships driven by steam engines and internal combustion engines.

During the 19th century, the capitalist mode of production spread rapidly throughout the globe. Back in the early 70s of the last century, the oldest bourgeois country ‐ England ‐ produced more fabrics, smelted more iron, mined more coal than the United States of America, Germany, France, Italy, Russia, and Japan combined. England held the primacy in world industrial production and an undivided monopoly on the world market. By the end of the 19th century, the situation had changed dramatically. The young capitalist countries have grown their own large‐scale industry. In terms of industrial production, the United States of America ranked first in the world, and Germany ranked first in Europe. Despite the obstacles created by the thoroughly rotten tsarist regime, Russia quickly followed the path of industrial development.

As the transition to imperialism proceeded, the contradictions between the productive forces and the production relations of capitalism began to take on ever sharper forms. The subordination of production to the predatory goals of the capitalistsʹ pursuit of the highest profit has created numerous obstacles to the development of productive forces and technical progress. Economic crises of overproduction began to recur more frequently, their destructive power increased, and the army of the unemployed grew. Along with the growth of poverty and deprivation of the working masses of town and countryside, there was an unprecedented increase in wealth concentrated in the hands of a handful of exploiters. The aggravation of irreconcilable class contradictions between the bourgeoisie and the proletariat led to the intensification of the economic and political struggle of the working class.

During the period of transition to imperialism, the major capitalist powers of Europe and America seized vast colonial possessions by force and deceit. A small handful of capitalistically developed countries have turned the majority of the worldʹs population into colonial slaves who hate their oppressors and fight against them. Colonial conquests have greatly expanded the field of capitalist exploitation; the degree of exploitation of the working masses steadily increased. The extreme aggravation of the contradictions of capitalism has found expression in the devastating imperialist wars that claim many human lives and destroy enormous material values.

The historical merit of the Marxist study of imperialism as the highest and at the same time the last stage in the development of capitalism, as the eve of the socialist revolution of the proletariat, belongs to VI Lenin. In his classic work Imperialism, the Highest Stage of Capitalism and in a number of other works written mainly during the First World War, Lenin summed up the development of world capitalism in the half century since the publication of Marxʹs Capital. Relying on the laws of the emergence, development and decline of capitalism discovered by Marx and Engels, Lenin gave an exhaustive scientific analysis of the economic and political essence of imperialism, its laws, and insoluble contradictions.

According to Leninʹs classical definition, the main economic features of imperialism are: “1) the concentration of production and capital, which has reached such a high stage of development that it has created monopolies that play a decisive role in economic life; 2) the merging of banking capital with industrial capital and the creation, on the basis of this ʺfinancial capitalʺ, of a financial oligarchy; 3) the export of capital, in contrast to the export of goods, is of particular importance; 4) international monopoly unions of capitalists are formed, dividing the world, and 5) the territorial division of the land by the major capitalist powers is completed” [1] .
Concentration of production and monopoly. Monopolies and competition.

In the pre‐monopoly period, under the rule of free competition, the operation of the law of concentration and centralization of capital inevitably led to the victory of large and large enterprises, in comparison with which small and mediumsized enterprises play an increasingly subordinate role. In turn, the concentration of production prepared the transition from the rule of free competition to the rule of monopolies.

In Germany, in enterprises with more than 50 employees, in
1882, 22% of all workers and employees were concentrated, in 1895 ‐ 30, in 1907 ‐ 37, in 1925 ‐ 47.2, in 1939 ‐ 49.9%. The share of the largest enterprises (with more than a thousand employees) in the entire industry grew from 1907 to 1925: in terms of the number of employees ‐ from 9.6 to 13.3%, in terms of engine power ‐ from 32 to 41.1%.

In the United States of America in 1904, the largest enterprises with a production worth a million dollars or more accounted for 0.9% of the total number of enterprises; 25.6% of the total number of workers were employed at these enterprises, and they provided 38% of the total gross industrial output. In 1909, the largest enterprises, accounting for 1.1% of the total number of enterprises, had 30.5% of all employed workers and provided 43.8% of the total gross industrial output. In 1939, the largest enterprises, accounting for 5.2% of the total number of enterprises, concentrated 55% of all employed workers and
67.5% of the total industrial output.

Russian industry was distinguished by a high degree of concentration . In Russia in 1879, large enterprises (with more than 100 workers) accounted for 4.4% of all enterprises and concentrated 54.8% of the total production. In 1903, 76.6% of all industrial workers were concentrated in large enterprises, and they provided the overwhelming majority of industrial output. The concentration of production proceeds most rapidly in heavy industry and in the new branches of industry (chemical, electrical engineering, automotive, etc.), lagging behind in light industry, in which there are many small and medium‐sized enterprises in all capitalist countries.

One of the forms of concentration of production is a combination, that is, the combination in one enterprise of different types of production, which are either successive stages of processing raw materials (for example, metallurgical plants that combine ore mining, iron and steel smelting, production of rolled products), or playing an auxiliary role alone. in relation to another (for example, the use of production waste). The combination gives large enterprises an even greater advantage in the competition.

At a certain stage of its development, the concentration of production leads close to monopoly. Large enterprises require huge masses of profit in order to withstand the fierce competition with the same giants and be able to further expand production, and high profits are ensured only by monopoly dominance in the market. On the other hand, it is easier for a few dozen giant enterprises to come to an agreement among themselves than for hundreds and thousands of small enterprises. Thus, free competition is replaced by monopoly.
This is the economic essence of imperialism.
A monopoly is an agreement, alliance or association of capitalists who have concentrated in their hands the production and marketing of a significant part of the output of one or several industries in order to establish high prices for goods and obtain monopoly high profits.

The simplest forms of monopoly are short‐term sales price agreements. They have various names: conventions, corners, rings, etc. More developed forms of monopoly are cartels, syndicates, trusts, and concerns.

A cartel is a monopolistic union whose members agree on the terms of sale, terms of payment, divide sales markets among themselves, determine the quantity of goods produced, and set prices. The quantity of goods that each of the cartel members is entitled to produce and sell is called a quota; for violation of the quota, a fine is paid to the cashier of the cartel.

A syndicate is a monopoly organization in which the sale of goods and sometimes the purchase of raw materials are carried out by a common office. Trust is a monopoly in which the ownership of all enterprises is combined, and their owners have become shareholders who receive a profit according to the number of shares or shares they own. At the head of the trust is the board, which manages all production, marketing of products and finances of formerly independent enterprises. Trusts are often included in larger unions ‐ concerns. A concern is an association of a number of enterprises in various branches of industry, trading firms, banks, transport, and insurance companies on the basis of a common financial dependence on a certain group of the largest capitalists.

The monopolies occupy commanding heights in the economies of the capitalist countries. They embraced heavy industry, as well as many branches of light industry, railway and water transport, banks, domestic and foreign trade, and established their oppression over agriculture.

The ferrous metallurgy of the United States of America is dominated by eight monopolies, which in 1952 controlled 84% of the countryʹs total steel production capacity; of these, the two largest ‐ the American Steel Trust and the Bethlehem Steel Corporation ‐ had 51% of the total production capacity. The oldest monopoly in the United States is the Standard Oil Trust. In the automotive industry, three firms are of decisive importance: General Motors, Ford, and Chrysler. The electrical industry is dominated by two firms: General Electric and Westinghouse. The chemical industry is controlled by the Dupont de Nemours concern, and the aluminum industry by the Mellon concern.

In England, the role of monopoly associations increased especially after the First World War, when cartels arose in the textile and coal industries, in ferrous metallurgy, and in a number of new branches of industry. The English Chemical Trust controls about nine‐tenths of all basic chemicals, about two‐fifths of all dyes, and nearly all of the countryʹs nitrogen production. He is closely connected with the most important branches of British industry, and especially with military concerns.

In Germany, cartels have become widespread since the end of the last century. Between the two world wars, the countryʹs economy was dominated by the Steel Trust (ʺVereinigte Stalwerkeʺ), which had about 200 thousand workers and employees, the Chemical Trust (ʺInteressen Gemeinschaft Farbenindustryʺ) with 100 thousand workers and employees, the monopoly of the coal industry, the cannon concern Krupp, electrical concerns ʺGeneral Electricity Companyʺ and
ʺSiemensʺ.

In France, Japan , and even in such small countries as Belgium, Sweden, Switzerland, monopoly organizations occupy commanding positions in industry.

In Russia, the big monopolies primarily embraced the main branches of heavy industry. The syndicate ʺProdametʺ (an association for the sale of products of metallurgical enterprises), which arose in 1902, controlled the sale of more than four‐fifths of ferrous metal. In 1904, the Prodvagon syndicate was organized, which almost completely monopolized the production and sale of wagons. The same syndicate united locomotive factories. The syndicate ʺProdugolʺ was created in 1904 by the largest coal enterprises of the Donbass, owned by Franco‐Belgian capital; it covered three‐quarters of all coal production in the Donbass.

Bourgeois economists, trying to embellish modern capitalism, assert that the spread of monopolies leads to a cure in the bourgeois system of such evils as competition, anarchy of production, and crises. In fact, not only is imperialism unable to eliminate competition, anarchy in production, and crises, but it sharpens all the contradictions of capitalism even more.

Lenin pointed out that imperialism cannot rebuild capitalism from top to bottom. With the dominant role of monopolies in all capitalist countries, numerous medium and small enterprises, and masses of small producers—peasants and artisans—are preserved.

The monopoly that is being created in some branches of industry increases the chaotic nature of capitalist production as a whole. Not only is competition not eliminated, but it is taking even more acute forms.

First, competition does not stop within monopolies. Members of syndicates and cartels fight among themselves for the most profitable markets, for a large share (quota) of production and sales. In trusts and concerns there is a struggle for leading positions, for controlling blocks of shares, for the distribution of profits.

Secondly, competition is conducted between monopolies: both between monopolies of the same industry, and between monopolies of different industries that supply goods to each other (for example, steel and automobile trusts) or produce goods that can replace each other (coal, oil , electricity). Given the limited capacity of the domestic market, the monopolies producing consumer goods are waging a fierce struggle for the sale of their goods.

Thirdly, competition occurs between monopolies and nonmonopolized enterprises. Monopolized industries are in a privileged position in relation to other industries. The monopolies take every measure to stifle ʺforeignʺ, ʺwildʺ enterprises that do not belong to monopoly associations. “Monopolies, growing out of free competition, do not eliminate it, but exist above it and next to it, thereby giving rise to a number of especially sharp and sharp contradictions, frictions, conflicts” [2] . The dominance of monopolies gives the competitive struggle a particularly destructive and predatory character. Monopolies use all possible methods of direct violence, bribery and blackmail, resort to complex financial fraud.

The dominance of monopolies means a further deepening of the basic contradiction of capitalism ‐ the contradiction between the social character of production and the private capitalist form of appropriation, as a result of which crises become even more devastating.

Concentration and monopolies in banking. The new role of banks.

The idea of the real strength and significance of modern monopolies cannot be sufficiently complete without taking into account the role of banks. In banking, as in industry, there is a concentration of capital and a transition from free competition to monopoly. Initially, banks served mainly as intermediaries in payments. With the development of capitalism, the activities of banks as merchants of capital expanded. The accumulation of capital and the concentration of production in industry have led to the concentration of huge free funds in banks, looking for a profitable application. The share of large banks in the total mass of banking turnover has been steadily growing.

During the 33 years before the First World War (1880‐1913), the growth in deposits in the banking systems of the four largest capitalist states ‐ the United States of America, Germany, England, and France ‐ alone amounted to 127 billion marks. Since then, the growth of deposits has been even faster; in a period twice as short, from 1913 to 1928, deposits in these countries increased by 183 billion marks.

In the United States of America , the 20 largest banks accounted for 15% in 1900, 19% in 1929, 27% in 1939, and 29% in 1952 of the total amount of deposits in all US banks. In England, the sum of the balance sheets of the five largest banks in 1900 was 28%; in 1916, 37; in 1929, 73; and in 1952, 79% of the total balances of all English depository banks. In France , the six deposit banks in 1952 accounted for 66% of the total deposits in all French banks. In Germany on the eve of the First World War, about half of the deposits available in all German banks were concentrated in large Berlin banks, and in 1929‐1932. ‐ two‐thirds.

Concentration in banking, as in industry, leads to monopoly. The largest banks, through the purchase of shares, the provision of credit, etc., subjugate the small ones. Having seized a monopoly position, large banks enter into agreements among themselves on the division of spheres of influence. Monopoly unions of banks are formed. Each such union commands dozens and sometimes hundreds of smaller banks, which actually become branches of large ones. Through a developed network of branches, large banks collect funds from many enterprises in their cash desks. Almost the entire money capital of the capitalist class and the savings of other sections of the population fall into the hands of small groups of bank tycoons.

The concentration of industry and the formation of banking monopolies lead to a significant change in the relationship between banks and industry. With the increase in the size of enterprises, large, long‐term loans extended by banks to industrial capitalists become increasingly important. The growth in the mass of deposits at the disposal of banks opens up wide possibilities for such a long‐term investment of bank funds in industry. The most common form of investing bank money in industry is the purchase of shares in various enterprises. Banks contribute to the formation of joint‐stock enterprises by taking over the reorganization of the enterprises of individual capitalists into joint‐stock companies and the creation of new joint‐stock companies (foundation).

From modest intermediaries, banks are turning into allpowerful money market monopolists. The interests of banks and industrial enterprises are intertwined ever more closely. When a bank finances several large enterprises in a certain industry, it is interested in a monopoly agreement between them and promotes such an agreement. In this way, banks greatly intensify and accelerate the process of concentration of capital and the formation of monopolies.

Financial capital and financial oligarchy.

As a result of the fact that banks become co‐owners of industrial, commercial, transport enterprises, acquiring their shares and bonds, and industrial monopolies, in turn, own shares of banks associated with them, there is an interweaving of monopoly banking and industrial capital, a new type of capital arises ‐ financial capital. Finance capital is the fused capital of banking and industrial monopolies. The era of imperialism is the era of finance capital.

Defining financial capital, Lenin emphasized three most important points: “Concentration of production; the monopolies that grow out of it; the merging or merging of banks with industry ‐ this is the history of the emergence of finance capital and the content of this conceptʺ [3] .

The merging of banking capital with industrial capital is clearly manifested in the personal union of the leaders of banking and industrial monopolies. The same persons head the largest monopoly associations in banking, industry, trade, and other branches of the capitalist economy.

In Germany, before the First World War, the six largest Berlin banks had their proteges as directors in 344 industrial enterprises and as board members in another 407, for a total of 751 companies. On the other hand, the governing bodies of these six banks included 51 major industrialists. In the future, this personal union was further developed. In 1932, the governing bodies of the three main Berlin banks included 70 of the largest representatives of industry. In the United States of America in 1950, a narrow group of 400 industrialists and bankers occupied one‐third of the 3,705 directorial positions in the 250 largest corporations (joint‐stock companies) that owned
42% of the countryʹs capital.

In every capitalist country, small handfuls of the biggest bankers and monopoly industrialists hold in their hands all the vital branches of the economy, disposing of the overwhelming mass of social wealth. The management of capitalist monopolies inevitably becomes the rule of a financial oligarchy (the Greek word ʺoligarchyʺ literally means ʺthe rule of a fewʺ). Imperialism is characterized by the omnipotence of monopoly trusts and syndicates, banks, and financial oligarchy in the industrial countries.

The domination of the financial oligarchy in the economic field is carried out primarily through the so‐called ʺparticipation systemʺ. It consists in the fact that a large financial businessman or a group of businessmen holds in his hands the main jointstock company (“mother company”) that heads the concern; this company, in turn, owning controlling stakes, dominates the “subsidiaries” dependent on it; they manage in a similar way in ʺgrandchildren societiesʺ, etc. Through this system, financial tycoons get the opportunity to dispose of huge amounts of foreign capital.

With the help of a widely ramified system of participation, the eight largest US financial groups ‐ Morgan, Rockefeller, KuhnLoeb, Mellon, DuPont, Chicago, Cleveland, and Boston ‐ dominate the entire economy of the country. Morganʹs sphere of influence by 1948 covered banks and corporations with a total capital of 55 billion dollars, Rockefeller ‐ 26.7 billion, Du Pont ‐ 6.5 billion, Mellon ‐ 6 billion dollars.
The financial oligarchy, which enjoys a virtual monopoly, receives huge and ever‐growing masses of profits from the foundation (that is, the creation of joint‐stock companies), from the issuance of shares and bonds, from the placement of state loans, from profitable state orders. Financial capital, concentrated in a few hands, collects ever‐increasing tribute from society.

The export of capital.

For pre‐monopoly capitalism, with the dominance of free competition, the export of goods was typical. For imperialist capitalism, with the dominance of monopolies, the export of capital has become typical.

On the threshold of the 20th century, in the richest countries, where the accumulation of capital reached enormous
proportions, there was a huge ʺsurplus of capitalʺ.

Capital is ʺsurplusʺ mainly for two reasons. First, the miserable standard of living of the masses puts up obstacles to the further growth of production. Secondly, the lag of agriculture behind industry and, in general, the uneven development of various sectors of the economy is becoming more and more intensified. If capitalism could raise agriculture, raise the standard of living of the working masses, then there could be no question of any
ʺsurplus of capitalʺ.

But then capitalism would not be capitalism, for both the uneven development and the semi‐starvation standard of living of the masses of the population are the fundamental conditions and prerequisites for this mode of production. The surplus of capital in the capitalist developed countries is thus of a relative nature. The need for the export of capital is created by the fact that in a few countries capitalism is ʺoverripeʺ , and capital lacks (given the underdevelopment of agriculture and the poverty of the masses) the field of “profitable” premises”[4].

In pursuit of maximum profit, ʺsurplusʺ capital rushes abroad. Capital is mainly exported to backward countries, where capital is scarce, wages are low, raw materials are cheap, and the price of land is comparatively low. In these countries, monopoly capital has the opportunity to receive, and indeed receives, huge profits.

Along with the backward countries, capital is also exported to the industrialized countries. This takes place during a period of particularly rapid development of such countries, which calls for an influx of capital from outside (for example, the United States before the First World War), or in an environment of their weakening caused by the war (Germany after the First World War, the Western European capitalist countries after the Second
World War ).

The export of capital takes place in two main forms: in the form of loan capital and in the form of productive capital. The export of loan capital takes place when loans are granted to governments, cities, banks of other countries. The export of productive capital is carried out through the creation of industrial enterprises abroad, concessions, the construction of railways, and also by buying up for a pittance already existing enterprises in countries that have weakened (for example, as a result of the war).

Bourgeois economists and politicians portray the export of capital as ʺaidʺ and ʺbenefitsʺ allegedly rendered by developed capitalist countries to backward peoples. In fact, the export of capital, while accelerating the development of capitalist relations in backward countries, at the same time leads to the all‐round enslavement and plunder of these countries by foreign monopolies.

The export of capital is closely connected with the growth of the export of goods. Foreign monopolies seize markets and sources of raw materials in debtor countries. Thus, the export of capital is one of the foundations of a system of imperialist oppression in which a few rich usurer countries exploit most of the world. The world has been divided into a handful of usurer states and a vast majority of debtor states.

The export of capital has serious consequences for the countries exporting capital. These countries, on the one hand, increase their wealth and strengthen their positions in the world market. They receive from outside a constant influx of surplus value in the form of interest on loans or profits from foreign enterprises. On the other hand, often there is a stagnation in the own industrial development of the country exporting capital. One of the important results of the export of capital is the growth of rivalry between the powers, the struggle for the most profitable areas for the investment of capital.

Before the First World War, the main exporting countries were England, France, and Germany. Their investments abroad amounted to 175 ‐ 200 billion francs: England ‐ 75 ‐ 100 billion, France ‐ 60 billion, Germany ‐ 44 billion francs. The export of capital from the United States has not yet played a major role, amounting to less than 10 billion francs.

After the war of 1914‐1918 there have been major changes in world capital exports. Germany lost its capital abroad. The foreign investments of England and France were significantly reduced, and the export of capital from the United States increased greatly. In 1929, the USA almost equaled Britain in terms of the size of its foreign investments. After the Second World War, the export of capital from the United States increased even more.

The economic division of the world between the unions of capitalists. international monopolies.

As the export of capital grows, as foreign ties expand and the ʺspheres of influenceʺ of the largest monopolies expand, conditions are created for dividing the world market between them. International monopolies are formed.

International monopolies are agreements between the largest monopolies of various countries on the division of markets, price policy, and the size of production. The formation of international monopolies signifies a new stage in the concentration of production and capital, incomparably higher than the previous ones.

Defenders of international monopolies try to present them as an instrument of peace, asserting that international agreements between monopolists can peacefully settle the contradictions that arise between imperialist groups and countries. Such statements have nothing to do with reality. In fact, the economic division of the world by international monopolies takes place depending on the strength of the parties, while the strength of individual monopoly groups varies. Each of them is incessantly fighting to increase its share, to expand the sphere of monopoly exploitation. Changes in the balance of power inevitably entail an intensification of the struggle for the redistribution of markets, an aggravation of contradictions between various groups and the states that support them. The international agreements of the monopolists are notable for their fragility and contain the source of inevitable conflicts.

International monopolies began to emerge in the 1860s and 1880s. By the end of the last century, their total number did not exceed 40. On the eve of the First World War, there were about 100 international cartels throughout the world, and before the
Second World War, their number exceeded 300.

Even before the First World War, the oil market was actually divided between the American trust Standard Oil, which was in the hands of Rockefeller, and the Royal‐Dutch‐Shell concern, with the predominant influence of British capital.

The market for electrical products was divided between two monopoly firms: the German General Electric Company and the American General Electric Corporation, controlled by the
Morgan group.

International monopolistic agreements even covered such areas as the production of weapons. The largest arms manufacturers ‐ Armstrong‐Vickers in England, Schneider‐Creusot in France, Krupp in Germany, Bofors in Sweden ‐ have been linked together by many threads for a long time.
The international monopolies played a big role in the preparations for the Second World War. The largest monopolies of the United States, Britain, and France, bound by cartel agreements with German trusts, inspired and directed the policy of the ruling circles of these countries, the policy of encouraging and inciting Hitlerite aggression, which led to war.

Completion of the territorial division of the world between the great powers and the struggle for its redistribution.

Along with and in connection with the economic division of the world between capitalist alliances, there is a territorial division of the world between bourgeois states, a struggle for colonies, a struggle to seize foreign lands.

Colonies are called countries deprived of state independence and constituting the possessions of imperialist metropolitan states. In the epoch of imperialism, there are also various types of dependent countries ‐ semi‐colonies. Semi‐colonies are called countries that are formally independent, but in reality are politically and economically dependent on the imperialist states.

The defenders of the bourgeoisie portray imperialist rule over the colonies as a ʺcivilizing missionʺ supposedly aimed at leading the backward peoples onto the path of progress and independent development. In fact, imperialism dooms colonial and dependent countries to economic backwardness, and hundreds of millions of the population of these countries to unprecedented oppression and bondage, lack of rights and poverty, hunger, and ignorance. The seizure of the colonies by the imperialist powers leads to an unprecedented intensification of national oppression and racial discrimination. According to Lenin, capitalism, from being a liberator of nations, as it was during the period of struggle against feudalism, at the stage of imperialism has turned into a monstrous oppressor of nations.

Back in the middle of the 18th century, England enslaved India ‐ a country with the richest natural resources and a population that is many times larger than the population of the metropolis. In the middle of the 19th century, the United States of America seized vast territories from neighboring Mexico, and in the following decades established its dominance over a number of countries in Latin America.

In the 60s and 70s of the last century, the colonial possessions of European countries still occupied a relatively small part of overseas lands. In 1876, only one tenth of the territory of Africa was occupied by the colonies of European countries. About half of the Asian continent and the islands of the Pacific Ocean
(Polynesia) have not yet been captured by the capitalist states.

In the last quarter of the 19th century, the map of the world underwent fundamental changes. Following the oldest colonial power, England, all the developed capitalist countries embarked on the path of territorial conquest. France by the end of the 19th century had become a major colonial power with possessions of 3.7 million square miles. Germany captured a million square miles of territory with 14.7 million people, Belgium ‐ 900 thousand square miles with 30 million people, the United States captured the most important stronghold in the Pacific Ocean ‐ the Philippine Islands, as well as Cuba, Puerto Rico, Guam, the Hawaiian Islands, the island Samoa, established their actual dominance over a number of countries in Central and South America.
From 1876 to 1914, the so‐called ʺgreat powersʺ captured about 25 million square kilometers of territory, which is one and a half times the area of the metropolitan countries. A number of countries were placed in conditions of semi‐colonial dependence on imperialist states: China, with a population of almost one‐fourth of all mankind, as well as Turkey and Persia (Iran). By the beginning of the First World War, more than half of humanity was under the rule of the colonial powers.

The imperialists establish and maintain their power over the colonies through methods of deceit and violence, using the superiority of their military technology. The history of colonial policy is a continuous chain of wars of conquest and punitive expeditions against enslaved peoples, as well as bloody conflicts between countries that own colonies. Lenin called the war of the United States against Spain in 1898 the first war of the imperialist type, which marked the beginning of the era of imperialist wars. The uprising of the Filipino people against the invaders was brutally suppressed by American troops.

England, which created the largest colonial empire, for more than two centuries waged uninterrupted wars of extermination against the population of the occupied countries of Asia and Africa. The history of colonial seizures by Germany, France,
Japan, Italy, and other countries is full of cruelties.

By the beginning of the 20th century, the division of the world was completed. The colonial policy of the capitalist countries led to the seizure of all lands not occupied by the imperialists. There are no more ʺfreeʺ lands left, a situation has arisen in which each new seizure involves taking the territory from its owner. The completion of the division of the world put the struggle for its redivision on the queue. The struggle for the redistribution of the already divided world is one of the main distinguishing features of monopoly capitalism. This struggle eventually turns into a struggle for world domination and inevitably leads to imperialist wars on a world scale.

Imperialist wars and the arms race bring enormous hardships to the peoples of all capitalist countries and cost millions of human lives. At the same time, wars and the militarization of the economy are a source of income for the monopolies, giving them particularly high profits.

Basic economic law of monopoly capitalism.

As already mentioned, the economic essence of imperialism lies in the replacement of free competition by the domination of monopolies. Monopolies, setting monopoly prices, set as their goal, according to Leninʹs definition, obtaining monopoly high profits, which significantly exceed the average profit. The receipt of high monopoly profits by the monopolies follows from the very essence of imperialism and is ensured by the unprecedented intensification of the exploitation by the monopolies of the working class, the robbery of the peasantry and other small commodity producers, the export of capital to backward countries and the draining of all the vital juices from these countries, colonial conquests, imperialist wars, which are a golden mine for monopolies. In the works of Lenin, devoted to the disclosure of the economic and political essence of imperialism, given the initial provisions of the basic economic law of modern capitalism. Based on these initial propositions of Lenin, Stalin formulated the basic economic law of modern capitalism.

The main features and requirements of the basic economic law of monopoly capitalism are as follows:

“ensuring the maximum capitalist profit through the exploitation, ruin and impoverishment of the majority of the population of a given country, through the enslavement and systematic robbery of the peoples of other countries, especially backward countries, and finally, through wars and the militarization of the national economy used to ensure the highest profits.”

[5]

Thus, the basic economic law of capitalism ‐ the law of surplus value ‐ in the period of imperialism receives its further development and concretization. Whereas under pre‐

monopoly capitalism the dominance of free competition led to an equalization of the rate of profit of individual capitalists, under imperialism the monopolies ensure for themselves a monopolistically high, maximum profit. It is the maximum profit that is the engine of monopoly capitalism.

The objective conditions for obtaining maximum profits are created by the establishment of the dominance of monopolies in certain branches of production. At the stage of imperialism, the concentration and centralization of capital reach its highest degree. Because of this, the expansion of production requires huge capital investments. On the other hand, during the period of monopoly capitalism, a fierce competitive struggle unfolds between gigantic enterprises. In this struggle, the strongest monopolies win, having the largest capitals and receiving the maximum profits.

Due to the maximum profits, the monopolies are able to carry out expanded reproduction and ensure their dominance in the capitalist world. The pursuit of maximum profit by the monopolies leads to an extreme aggravation of all the contradictions of capitalism.

The general basis of the maximum profit of the capitalist monopolies, as of all capitalist profit, is the surplus value squeezed out of the workers by exploiting them in the process of production. The exploitation of the working class is increased by the monopolies to an extreme degree. Through the use of all kinds of sweatshop systems of organizing and remunerating            labor, an        uninterrupted,            debilitating intensification of labor is achieved, which means, first of all, a huge increase in the rate and mass of surplus value squeezed out of the workers. Further, the intensification of labor leads to the fact that many workers are redundant and fall into the ranks of the army of unemployed, deprived of any hope of returning to the production process. All workers are also thrown out of enterprises, for whom excessive acceleration of production processes is unbearable.

In the USA, the rate of surplus value in the mining and manufacturing industries, calculated on the basis of official data, was 145% in 1889, 165% in 1919, 210% in 1929, and 220% in 1939. Thus, in 40 years the rate of surplus‐value has increased l > 1/2 times .

At the same time, real wages are steadily declining as a result of the rising cost of living. Rising prices for livelihoods, the increasing burden of the tax burden and inflation further reduce the real earnings of the worker. In the era of imperialism, the gap between the wages of the worker and the value of his labor power increases enormously. This signifies an even more drastic effect of the general law of capitalist accumulation, which causes the relative and absolute impoverishment of the proletariat. The growth of the exploitation of the working class in the process of production is complemented by the plundering of the working people as consumers; the workers have to overpay large sums to the monopolies, which charge high monopoly prices for the goods they produce and sell.

Under conditions of monopoly capitalism, goods produced by the monopolies are no longer sold at production prices, but at much higher—monopoly—prices.

Monopoly price equals production costs plus maximum profit, which is much higher than the average rate of profit; the monopoly price is higher than the price of production and, as a rule, exceeds the cost of goods. At the same time, the monopoly price, as Marx pointed out, cannot destroy the boundaries determined by the cost of goods. The high level of monopoly prices does not change the total amount of value produced in the world capitalist economy and surplus value: what the monopolies gain, the workers, small producers, and the population of dependent countries lose. One of the sources of maximum profit that monopolies receive is the redistribution of surplus value, as a result of which non‐monopolized enterprises often do not even gain an average profit. By maintaining prices at a high level that exceeds the cost of goods, monopolies appropriate the results of the growth of labor productivity and the reduction of production costs. Thus they levy ever‐increasing tribute on the population.

The customs policy of the bourgeois states is an important instrument of monopolistic inflation of prices. In the era of free competition, high customs duties were resorted to mainly by weaker countries. whose industries needed protection from foreign competition. In the epoch of imperialism, on the contrary, high duties serve as a means for the monopolies to attack, to fight for the capture of new markets. High duties help maintain monopoly prices within the country.

In order to conquer new foreign markets, monopolies widely use dumping   ‐ sale. goods abroad at bargain prices, well below domestic market prices, and often even below production costs. Expansion of sales abroad in the form of dumping makes it possible to maintain high prices within the country without reducing production, and the losses caused by junk exports are covered by rising prices in the domestic market. After this external market has been conquered and assigned to the monopolies, they go over to selling goods at high monopoly prices.

The exploitation of the bulk of the peasantry by the monopolies is expressed primarily in the fact that the domination of the monopolies gives rise to a growing discrepancy between the level of prices for agricultural products and industrial goods (the so‐called ʺscissorsʺ of prices): while selling goods at artificially inflated prices, the monopolies at the same time buy the peasants have the products of their farms at extremely low prices. Being a tool for draining funds from agriculture, monopoly prices retard its development. One of the strongest levers for the ruin of peasant farms is the development of mortgage credit. The monopolies entangle the peasants in debts and then appropriate their land and property for next to nothing.

The purchase by the monopolies of the products of the peasant economy at extremely low prices does not at all mean that the urban consumer enjoys cheap foodstuffs. Between the peasant and the urban consumer are intermediaries ‐ merchants united in monopoly organizations that ruin the peasants and rob the urban consumers.

“Capitalism,” wrote M. Thorez in his work “The Policy of the Communist Party in the Countryside,” managed to turn small peasant property ‐ parcels, on which peasants sometimes work 14‐16 hours a day ‐ not into a means of subsistence and prosperity for working peasants, but as a tool for their exploitation and enslavement. Through mortgages, through the machinations of financial pirates, through high taxes and extortions, high rents, and especially through competition from large landowners ‐ capitalists, the bourgeoisie ruins the middle and small peasants.

Further, the source of the maximum profits of the monopolies is the enslavement and plunder of the economically backward and dependent countries by the bourgeoisie of the imperialist states. The systematic plunder of the colonies and other backward countries, the transformation of a number of independent countries into dependent countries, are an inalienable feature of monopoly capitalism. Imperialism cannot live and develop without a continuous influx of tribute from the foreign countries it plunders.

The monopolies receive huge profits primarily from their investments   in colonial and dependent countries. These revenues are the result of the most cruel and inhuman exploitation of the working masses of the colonial world. The monopolies profit by unequal exchange,   that is, by selling their commodities in colonial and dependent countries at prices far exceeding their value, and by buying up commodities produced in these countries at exorbitantly low prices that do not cover their value. Along with this, the monopolies receive high profits from the colonies in transport, insurance, and banking operations.

Finally, wars and the militarization of the economy are a source of profit for the monopolies. Wars enrich the magnates of finance capital enormously, and in the intervals between wars the monopolies strive to maintain a high level of their profits by means of an unrestrained arms race. Wars and the militarization of the economy bring rich military orders to the monopolists, paid for by the treasury at inflated prices, and an abundant stream of loans and subsidies from the state budget. Enterprises working for the war are placed in exceptionally advantageous conditions with respect to the supply of raw materials, production materials and labor force. All labor laws are abolished, workers are declared mobilized, strikes are prohibited. All this makes it possible for the capitalists to raise the degree of exploitation to the extreme by bringing the intensity of labor to the highest limits.

Thus, the militarization of the capitalist economy, both in war and in peacetime, means a sharp increase in the exploitation of the working masses in the interests of increasing the maximum profits of the monopolies.

The basic economic law of modern capitalism, determining the entire course of development of capitalism at its imperialist stage, makes it possible to understand and explain the inevitability of growth and the aggravation of the insoluble contradictions inherent in it.

SUMMARY

1.                   Imperialism, or monopoly capitalism, is the highest and last stage in the development of the capitalist mode of production. The transition from pre‐monopoly capitalism to monopoly capitalism took place during the last third of the 19th century. Imperialism finally took shape by the beginning of the 20th century.

2.                   The main economic features of imperialism are: 1) the concentration of production and capital, which has reached such a high stage of development that it has created monopolies that play a decisive role in economic life; 2) the merging of banking capital with industrial capital and the formation on this basis of finance capital, of a financial oligarchy; 3) the export of capital, in contrast to the export of goods, is of particular importance; 4) international monopoly unions of capitalists are formed, dividing the world among themselves; 5) the territorial division of the land by the major imperialist powers has been completed. The completion of the economic division of the world leads to a struggle for its redistribution, which inevitably gives rise to imperialist wars on a world scale.

3.                   The basic economic law of monopoly capitalism consists in securing maximum capitalist profits by exploiting, ruining, and impoverishing the majority of the population of a given country, by enslaving and systematically plundering the peoples of other countries, especially backward countries, and finally, by wars and the militarization of the national economy.

[1]    V. I. Lenin, Imperialism, as the highest stage of capitalism, Works, vol. 22, p. 253.

[2]    V. I. Lenin, Imperialism as the highest stage of capitalism, Works, vol. 22, p. 253.

[3]    V. I. Lenin, Imperialism, as the highest stage of capitalism,

Works, vol. 22, p. 214.

[4]    V. I. Lenin, Imperialism, as the highest stage of capitalism, Works, vol. 22, p. 229.

[5]    I. V. Stalin, Economic problems of socialism in the USSR, p.

38.