Lenin’s ‘Imperialism’: A critical survey of the economic arguments
In the Preface to the 1920 French and German editions of Imperialism: The Highest Stage of Capitalism (1916), Vladimir Lenin summarised the result of “imperialism”:
Capitalism has grown into a world system of colonial oppression and of the financial strangulation of the overwhelming majority of the population of the world by a handful of “advanced” countries...
It is precisely the parasitism and decay of capitalism, characteristic of its highest historical stage of development, i.e., imperialism. As this pamphlet shows, capitalism has now singled out a handful (less than one-tenth of the inhabitants of the globe; less than one-fifth at a most “generous” and liberal calculation) of exceptionally rich and powerful states which plunder the whole world simply by “clipping coupons”. Capital exports yield an income of eight to ten thousand million francs per annum, at pre-war prices and according to pre-war bourgeois statistics. Now, of course, they yield much more.
Obviously, out of such enormous superprofits (since they are obtained over and above the profits which capitalists squeeze out of the workers of their “own” country) it is possible to bribe the labour leaders and the upper stratum of the labour aristocracy. And that is just what the capitalists of the “advanced” countries are doing: they are bribing them in a thousand different ways, direct and indirect, overt and covert. (1920, pp. 639-40; emphasis added)
The text of the “pamphlet” (1920, p. 636) aims to determine or define the essential features of imperialism. That is, Lenin aims to set out the differentia specifica of imperialism as a stage of capitalism that mark it out as, and cause it to be, a world system of oppression and “financial strangulation” of the “colonies and semicolonies” (1920, p. 637). He seeks these features in the necessary development of the capitalist economy and not in accidental aspects (for example, that capitalists from different economic spheres may have overlapping board memberships and connections to the state). The above quotation gives the reader some of the clues, but it will serve us well to follow Lenin through his exposition. It will also serve well to consider each stage of Lenin’s argument with a critical eye.
Method
Readers will note two interesting facts about Lenin’s method of presentation or exposition. First, at each step in his presentation — essentially chapter by chapter — he contrasts what is new against purely competitive capitalism. Secondly, he locates each step as were it at about the beginning of the twentieth century. That is, his exposition is not essentially sequential. The steps or stages do not necessarily follow in time, though some developments may follow others. Rather, Imperialism presents the stages in necessary priority. I am loath to say logical priority but, as long as we understand that “logical” refers to real features of the capitalist economy, then it is possible to use that term. Perhaps the easiest way to describe the sequential unfolding of Lenin’s presentation is that it proceeds in logically necessary order. The stages then are essentially contemporaneous aspects of imperialism as a new stage of capitalism. However, they are ordered necessarily, which is to say that some aspects are necessary for, or underpin, or underlay, or provide the necessary foundation for others.
Thus, monopoly is fundamentally necessary for, or is a prerequisite for, the domination of finance capital, which is necessary for the export of capital and the division of the world among the great powers and so on. Another way of describing logically necessity in this sense is to speak of causal necessity or causal priority, as long as we do not think about temporal but, perhaps, structural causality.
To cut short a very long story, Lenin adopts much the same method of presentation that Karl Marx described in his Introduction to the Grundrisse, the essentially Hegelian method of presentation found in Capital. While the method of enquiry proceeds from the concrete to the development of more and more abstract concepts, the scientific method of presentation should proceed from the more abstract fundamental concepts to the more concrete ensemble of concepts that describe the complexity of concrete reality. At each step towards the concrete, the earlier more fundamental abstractions appear one-sided, incomplete or insufficient. Hence, while still logically or causally necessary, they give way to or, better, are drawn up into a less one-sided representation, which then gives way and so on. Finally, to paraphrase Marx, we reproduce the concrete by way of thought: a rich, many-sided concrete (Grundrisse, Marx 1858-59, pp. 99-101).
The rich, many-sided concrete that Lenin aims to reproduce by way of thought is imperialism. It draws up implicitly fundamental features or aspects of capitalism per se but, because some of the historically specific features no longer prevail, the representation of imperialism sets them aside. The competitive aspects of a purely competitive capitalism — if, indeed, such a formation ever truly existed — thus fall away. In this way we can see the differences between the treatment of historical necessity, so to speak, and logical or causal necessity. The former negates some one-sidedness by excision and some by drawing up, the latter always by absorption and preservation (or, to use Georg Hegel’s term, aufheben or “sublation”). Lenin’s method of presentation of imperialism assumes the former and very much concentrates on the latter.
Monopoly
The first prerequisite for imperialism is that the concentration of capital anticipated by Marx has been accomplished fundamentally. Indeed, “the rise of monopolies, as the result of the concentration of production, is a general and fundamental law of the present stage of development of capitalism.” Moreover, Lenin dates the transformation in Europe, stating that “the time when the new capitalism definitely superseded the old can be established with fair precision; it was the beginning of the twentieth century” (2016, p. 645; emphasis added). Monopoly, as a necessary consequence of competition, has replaced competition as the dominant form of capitalism. Lenin quotes Rudolf Hilferding:
“Combination”, writes Hilferding, “levels out the fluctuations of trade and therefore assures to the combined enterprises a more stable rate of profit. Secondly, combination has the effect of eliminating trade. Thirdly, it has the effect of rendering possible technical improvements, and, consequently, the acquisition of superprofits over and above those obtained by the “pure” (i.e., non-combined) enterprises. Fourthly, it strengthens the position of the combined enterprises relative to the “pure” enterprises, strengthens them in the competitive struggle in periods of serious depression, when the fall in prices of raw materials does not keep pace with the fall in prices of manufactured goods. (2016, pp. 643-4; citing Hilferding 1912, pp. 286-7)
Size (scale) of production and technological innovation lie at the bottom of concentration, combination and monopoly. The consequence is greater profitability and, though Lenin does not labour the point, greater productivity (2016, pp. 642, 648). The two are not necessarily coextensive, but they are closely aligned. They come together necessarily in the notion of natural or technical monopoly, the upshot of economies of scale, but this is to anticipate something that Lenin did not deal with explicitly.
Nonetheless, the basic elements of a coherent theory of industrial monopoly — which is what Lenin describes — are there. Yet, for him, something more is required, an additional prerequisite of imperialism. “Monopoly! This is the last word in the ‘latest phase of capitalist development’. But we shall only have a very insufficient, incomplete, and poor notion of the real power and the significance of modern monopolies if we do not take into consideration the part played by the banks.” (1916, p. 653; emphasis added)
Finance capital
How has this “last word” in the development of capitalism materialised? Lenin looks first to the role of concentration in banking and then to how large-scale banking has facilitated industrial concentration. His identification of essential, necessary economic forces is, perhaps, more apparent in the latter than the former. However, we may grant him that the general mechanisms he identifies for industrial concentration apply in finance. He begins:
As banking develops and becomes concentrated in a small number of establishments, the banks grow from modest middlemen [facilitating payments] into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw materials in any one country and in a number of countries. This transformation of numerous modest middlemen into a handful of monopolists is one of the fundamental processes in the growth of capitalism into capitalist imperialism; for this reason we must first of all examine the concentration of banking. (1916, p. 653)
He offers evidence to support this contention but, as noted, less of an explanation than is satisfactory. We may read his argument something like this: bigger banks can mobilise the bigger capital required by bigger industrial concentrations. He also proposes that scale in banking improves financial specialisation and expertise and, therefore, reduces risk. Nevertheless, having established his point of fact satisfactorily, Lenin puts it to work:
The change from the old type of capitalism, in which free competition predominated, to the new capitalism, in which monopoly reigns, is expressed, among other things, by a decline in the importance of the Stock Exchange. The review, Die Bank [1914], writes: “The Stock Exchange has long ceased to be the indispensable medium of circulation that it formerly was when the banks were not yet able to place the bulk of new issues with their clients.”
“Every bank is a Stock Exchange”, and the bigger the bank, and the more successful the concentration of banking, the truer does this modern aphorism ring. (1916, p. 660; citing Die Bank 1914)
Moreover, the bigger banks facilitate scale economies and technical progress in industry. “The old struggle between small and big capital is being resumed at a new and immeasurably higher stage of development.” Lenin’s point is that “It stands to reason that the big banks’ enterprises, worth many millions, can accelerate technical progress with means that cannot possibly be compared with those of the past. The banks, for example, set up special technical research societies, and, of course, only ‘friendly’ industrial enterprises benefit from their work.” (1916, p. 665) The upshot is that monopoly in the banks and in industry proceed pari passu. However, the new role of the banks in mobilising capital for industry gives them the whip hand, as it were. Lenin concludes:
At precisely what period were the “new activities” of the big banks finally established? Jeidels gives us a fairly exact answer to this important question:
“The connections between the banks and industrial enterprises, with their new content, their new forms and their new organs, namely, the big banks which are organised on both a centralised and a decentralised [subsidiary] basis, were scarcely a characteristic economic phenomenon before the nineties; in one sense, indeed, this initial date may be advanced to the year 1897, when the important mergers took place and when, for the first time, the new form of decentralised organisation was introduced to suit the industrial policy of the banks. This starting-point could perhaps be placed at an even later date, for it was the crisis of 1900 that enormously accelerated and intensified the process of concentration of industry and of banking, consolidated that process, for the first time transformed the connection with industry into the actual monopoly of the big banks, and made this connection much closer and more active.”
Thus, the twentieth century marks the turning-point from the old capitalism to the new, from the domination of capital in general to the domination of finance capital. (2016, p. 666; citing Jeidels 1905, S. 183-84)
Lenin then summarises: “The concentration of production; the monopolies arising therefrom; the merging or coalescence of the banks with industry — such is the history of the rise of finance capital and such is the content” (1916, p. 667) of the concept of monopoly capitalism. The question is, how? More than that, Lenin seeks to establish how, “under the general conditions of commodity production and private property, the ‘business operations’ of capitalist monopolies inevitably lead to the domination of a financial oligarchy.” (1916, p. 667; emphasis added) The answer he gives is that “Paramount importance attaches to the ‘holding system’”, namely ownership by parent companies of subsidiaries. Again Lenin is less forthcoming in the first instance in explaining why, as opposed to describing how the system operates, save for saying that it puts subsidiaries at arm’s length, thus seemingly protecting the capital of the parent. Perhaps this is his explanation. However, the destruction of capital is the destruction of capital, whether it is at arm’s length or not. Indeed, interconnected ownership makes the system more brittle, transmitting the effects of a crisis every which way.
Perhaps Lenin’s second explanation is stronger. “Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc.”, he argues, and this, in turn, “strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists.” (1916, p. 672; emphasis added) Perhaps, but it is not at all clear why an enhanced capacity to garner non-bank capital should inevitably enhance the domination of finance capital. Apart from the state, the only other source at the time — well in advance of the big cooperative pension funds and working-class savings — should have been industrial capital. Elsewhere in Imperialism, Lenin describes the derelict state of agriculture in the advanced countries (1916, p. 672; see also the next section below).
His third explanation seems more promising, prima facie. It is that during “periods of industrial boom, the profits of finance capital are immense, but during periods of depression, small and unsound businesses go out of existence, and the big banks acquire ‘holdings’ in them by buying them up for a mere song, or participate in profitable schemes for their ‘reconstruction’ and ‘reorganisation’.” (1916, p. 674) Why finance capital per se seemingly sits outside the effects of a “depression” is not clear. Perhaps size is a buffer, spreading the effects of crisis. However, this just takes us back to lacunae in the first explanation. Were he writing in the 1930s, he might well have argued differently.
Lenin’s efforts to describe the facts are stronger than his explanations. His explanations seem thin, too thin to provide the necessity required for the argument of “inevitability”. His discussion of bond issues (1916, p. 673) also falls short. Nevertheless, by drawing together the descriptive threads, he takes us to the critical next stage in his argument:
From these figures we at once see standing out in sharp relief four of the richest capitalist countries, each of which holds securities to amounts ranging approximately from 100,000 to 150,000 million francs. Of these four countries, two, Britain and France, are the oldest capitalist countries, and, as we shall see, possess the most colonies; the other two, the United States and Germany, are capitalist countries leading in the rapidity of development and the degree of extension of capitalist monopolies in industry. Together, these four countries own 479,000 million francs, that is, nearly 80 per cent of the world’s finance capital. In one way or another, nearly the whole of the rest of the world is more or less the debtor to and tributary of these international banker countries, these four “pillars” of world finance capital. (1916, p. 678)
The next stage in Lenin’s exposition is the export of capital: “It is particularly important to examine the part which the export of capital plays in creating the international network of dependence on and connections of finance capital.” (1916, p. 678; emphasis added)
Export of capital by finance capital
“Typical of the old capitalism, when free competition held undivided sway, was the export of goods. Typical of the latest stage of capitalism, when monopolies rule, is the export of capital.” (1916, p. 678) This is how Lenin opens this “particularly important” part of his presentation. He notes later that, as with preceding steps in his exposition, “the export of capital reached enormous dimensions only at the beginning of the twentieth century.” (Lenin 1916, p. 679) Capital export underpins the network of dependence that has finance capital as its prerequisite, but why? The following long but fertile quote reinforces the point and offers the reason, namely a two-place necessity: surplus capital at home in the capitalistically “advanced” countries and higher returns in the capitalistically “backward” countries.
On the threshold of the twentieth century we see the formation of a new type of monopoly: firstly, monopolist associations of capitalists in all capitalistically developed countries; secondly, the monopolist position of a few very rich countries, in which the accumulation of capital has reached gigantic proportions. An enormous “surplus of capital” has arisen in the advanced countries.
It goes without saying that if capitalism could develop agriculture, which today is everywhere lagging terribly behind industry, if it could raise the living standards of the masses, who in spite of the amazing technical progress are everywhere still half-starved and poverty-stricken, there could be no question of a surplus of capital. This “argument” is very often advanced by the petty-bourgeois critics of capitalism. But if capitalism did these things it would not be capitalism; for both uneven development and a semi-starvation level of existence of the masses are fundamental and inevitable conditions and constitute premises of this mode of production. As long as capitalism remains what it is, surplus capital will be utilised not for the purpose of raising the standard of living of the masses in a given country, for this would mean a decline in profits for the capitalists, but for the purpose of increasing profits by exporting capital abroad to the backward countries. In these backward countries profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap. (1916, p. 679; emphasis added)
Surprisingly, Lenin explains neither why there should be a surplus of capital nor why, as he puts it: “The need to export capital arises from the fact that in a few countries capitalism has become ‘overripe’ and (owing to the backward state of agriculture and the poverty of the masses) capital cannot find a field for ‘profitable’ investment.” (1916, p. 679) Monopoly super-profits, perhaps, explain the superabundance of capital. Yet that would seem to contradict the assertion that capital might struggle for profitable employment at home. Some Marxist economists suggest the answer is Marx’s tendency of the rate of profit to fall due to a rising composition of capital (Capital III, chapter 13) — or, at least, some concatenation of forces that include the tendency (for example, Ernest Mandel 1975). Lenin does not suggest this explanation or, if it is implicit in the text, it is very well disguised. Instead, it is fair to read the above snippet to say that Lenin is offering in effect an underconsumption explanation of falling or insufficient profitability at home rather than the third-volume tendency of the rate of profit to fall. This fits with Lenin’s use of, and respect for, JA Hobson’s Imperialism: A Study (1902), a work avowedly underconsumptionist (1916, Preface 1917; see appended note on Hobson’s Imperialism).
His argument appears to be that the working class and peasants are too poor to provide the demand required for the sort of monopoly profitability hitherto earned. The rate of exploitation is too high. How then, if the fruit is overripe and profitability more problematic, do the monopolies earn super-profits domestically? Do they earn domestic super-profits at all? If they do not, how then is there a surplus of capital available for export? Are super-profits now earned solely or mainly offshore (see Introduction above)? In this case, is the very existence of surplus profits and surplus capital due to their supposed remedy, the export of capital? How precisely do offshore super-profits permit capital to buy out at least the upper echelons of the working class, the labour aristocracy? Lenin again is far from forthcoming. Surplus (or super-) profits and the inadequacy of domestic profitability remain moments suspended in tension, in unresolved opposition. In Lenin’s defence, none of these questions are clear in Marxian economics, even to this day. This is despite Michal Kalecki having dispersed the fog in the 1930s and later (see especially Kalecki 1967, 1968; see also Gordon 1987, pp. 132-3; Doughney 2016, 2025).
Perhaps two possibilities remain. First, it might be simply that returns in the backward countries are greater than they are at home, super-super profits, perhaps? Yet Lenin’s argument for this is surprising, and it is not convincing by itself. It is that capital is scarce in the backward countries, while labour and land are abundant and, therefore, cheap. It is, in other words, the standard neo-classical development case. Secondly, it could be that finance capital, because it can extend credit, is on the hunt for ever-increasing returns and, so be it, if these are in the backward countries, that is where finance capital will fund investment. It may well be that it is a simple empirical question. Lenin offers some evidence to this effect, along with possibly conflicting evidence that most capital exports are intra-advanced and intra-imperialist (see his own table, 1916, p. 680).
Lenin also presents two significant arguments to reinforce his central surplus capital-capital export case. A little later on, it will be clear why I have characterised his arguments in this way. The first “reinforcing argument” concerns securing sources of raw materials in the backward countries to feed home industries (see below). Inter-imperialist competition also is significant in this respect. The second, subordinate, reinforcement concerns trade advantage:
Finance capital has created the epoch of monopolies, and monopolies introduce everywhere monopolist principles: the utilisation of “connections” for profitable transactions takes the place of competition on the open market. The most usual thing is to stipulate that part of the loan granted shall be spent on purchases in the creditor country, particularly on orders for war materials, or for ships, etc. In the course of the last two decades (1890-1910), France has very often resorted to this method. The export of capital thus becomes a means of encouraging the export of commodities. (1916, p. 681)
In any event, the empirical answer concerning the export of capital is definitive, as Alice Amsden (1987, p. 209) noted in her entry “Imperialism” in the Palgrave economics dictionary:
…foreign investment, whether direct or indirect, did not flow preponderantly to backward regions. In the interwar period and even before 1914, the main destination for overseas funds was Europe and North America. British colonies, including India, accounted for only about 20 per cent, and South America for another 20 per cent (Barratt Brown, 1972). After 1929, the share of the advanced countries in the inflow of direct foreign investment rose even further, reaching around 75 per cent of the total in the mid-1970s. The share was higher still for direct foreign investment in the manufacturing sector (USDC, various years). Thus, while the locus of socialist revolutions was backward regions, not advanced ones, capital exports flowed increasingly to advanced regions, not backward ones. The direction of foreign investment is significant because it suggests an altogether different centre of gravity in economic activity under monopoly capitalism from the one Lenin’s followers entertained.
Beginning at the turn of the century, the principal orientation of the economic activity of advanced countries was, in general, toward each other, not the backward regions. Like foreign investment, foreign trade in manufactures largely engaged the advanced countries. Their competitive struggle involved mainly invasions of each other’s markets. The major contest in economic strength after World War II, between the US and Japan, barely stretched to third world shores.
Earlier in her entry, Amsden (1987, p. 208) had drawn attention to another empirical question that, after World War I, sat awkwardly with Lenin’s argument. This concerned not the direction of capital exports but their form:
Their Lenin based his analysis of imperialism on the stranglehold of finance capital, by which he meant the leading role that banks came to play in economic decision making. The financiers were perceived to have the biggest stake in imperialism and their hunger for quick returns led to economic chaos. Yet in fact after World War I finance capital decidedly took a back seat as the multinational firm grew in the US, Europe and, belatedly, England. As evidence for this, there was a shift over time away from indirect foreign investment, that is, portfolio or debt capital, to direct foreign investment, or equity capital. Roughly two-thirds of foreign investment took the form of debt capital before World War I. Thereafter, direct foreign investment became predominant, although a new type of portfolio investment rose again sharply in the late 1970s-early 1980s.
Finally, before moving on from the export of capital, it is incumbent on any survey of Imperialism to mention what, to today’s eyes, is a jarring analytical concern. Consider again the opening quotation of this section: “Typical of the old capitalism ... was the export of goods. Typical of the latest stage of capitalism ... is the export of capital.” (1916, p. 678) Admittedly, Lenin was writing before national income accounting became commonplace, nonetheless a problem is a problem is a problem, even more so if it is within a crucial part of the theory. Export of capital and export of commodities appear in the text in opposition. However, in point of fact, the export of capital and of commodities most often are just different sides of the same coin, which is to say that they commonly rise and fall together. A fundamental identity in that part of national income accounting dealing with the balance of payments is as follows:
Capital exports - capital imports + net change in gold and foreign exchange reserves = Exports - imports + net overseas income flows (profits, labour income, interest, etc) to our country
In symbols:
(Cx - Cm) + ∆GFE = (X - M) + O
The left-hand side is what used to be called the capital account (these days approximately the financial account), and the right-hand side the current account, of the balance of payments (see Doughney 2025 “Surplus profits, surplus capital, capital exports and imperialism?” for technicalities). Here we shall consider the balance of payments of the advanced, capital-exporting, country. If, as Lenin maintains, O is positive (profits and interest, especially, flow back to the advanced country), it is just possible for the trade balance (X - M) to be negative and capital exports to exceed capital imports (i.e. Cx - Cm is positive), assuming no changes in reserves of gold and foreign exchange. However, Lenin does not consider the point, and that is the theoretical concern. Recall the base case, which is that capital exports correspond with the export of commodities. This does not fit well with the way Lenin describes the shift from the old to the new form of capitalism, namely the shift to its imperialist stage.
Colonisation ‘fever’
The economic developments thus far conceptualised, Lenin argues, have led to a fever of colonial expansion. Note the tense of “have led”. Recall from the method section above that Lenin does not frame his conceptual argument as a causal chronology but in terms of causal-logical necessity. The concepts, moments or aspects of imperialism by and large represent contemporaneous economic developments. The economics of imperialism mean the export of capital. The export of capital engenders international concentration of capital and colonial expansion.
Capitalism long ago created a world market. As the export of capital increased, and as the foreign and colonial connections and “spheres of influence” of the big monopolist associations expanded in all ways, things “naturally” gravitated towards an international agreement among these associations, and towards the formation of international cartels.
This is a new stage of world concentration of capital and production, incomparably higher than the preceding stages ... supermonopoly develops. (1916, p. 683; emphasis added)
This new level of concentration, in turn, generates a desperate struggle for colonial possession. “The principal feature of the latest stage of capitalism is the domination of monopolist associations of big employers. These monopolies are most firmly established”, Lenin explains, “when all the sources of raw materials are captured by one group, and we have seen with what zeal the international capitalist associations exert every effort to deprive their rivals of all opportunity of competing, to buy up, for example, ironfields, oilfields, etc.” (1916, p. 695) That said, he makes an even stronger claim, one that is not at all at odds with the evidence of the time, namely that:
Colonial possession alone gives the monopolies complete guarantee against all contingencies in the struggle against competitors, including the case of the adversary wanting to be protected by a law establishing a state monopoly. The more capitalism is developed, the more strongly the shortage of raw materials is felt, the more intense the competition and the hunt for sources of raw materials throughout the whole world, the more desperate the struggle for the acquisition of colonies. (1916, p. 696; emphasis added)
Moreover, in parallel with the role the export of capital plays in underpinning international association and concentration of capital (“supermonopoly”), the export of capital per se drives colonialism: “The interests pursued in exporting capital also give an impetus to the conquest of colonies”, precisely because “in the colonial market it is easier to employ monopoly methods (and sometimes they are the only methods that can be employed) to eliminate competition, to ensure supplies, to secure the necessary ‘connections’, etc.” The upshot Lenin captures in a phrase from another author, the “fever of colonial expansion”. (1916, p. 699; emphasis added) However, having described the compelling forces behind outright colonial possession (“colonial possession alone”), he relaxes the case to allow for an intermediate form of imperialist domination, the semi-colony:
Since we are speaking of colonial policy in the epoch of capitalist imperialism, it must be observed that finance capital and its foreign policy, which is the struggle of the great powers for the economic and political division of the world, give rise to a number of transitional forms of state dependence. Not only are the two main groups of countries, those owning colonies, and the colonies themselves, but also the diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence, typical of this epoch. We have already referred to one form of dependence — the semi-colony. An example of another is provided by Argentina. (1916, p. 697)
Imperialism
What then is the differentia specifica of Lenin’s “imperialism”, that which defines it: that which, in addition to the underlying dominance of monopoly finance capital, establishes its essential nature? Unambiguously, imperialism’s international dimension provides the answer. This may seem obvious, a truism. Why make more of it?
The reason lies in the causal logic that embeds the international dimension in capital’s concentration, monopolisation and the dominant position of finance. It lies in the causal logic that shapes its character. Just such causes are the identification of “overripe” profitability at home, of the consequent existence of surplus capital, of greater profitability in the backward countries (not merely in other more advanced economies) and, therefore, of the export of capital. Such causes are, to him, necessary aspects or moments in the life of monopoly finance capital. Expressed differently, the health of capital in the advanced countries depends necessarily upon the international dimension. The other factors — security of raw materials and export enhancement — are important, to be sure. However, the former are at the heart of the economic dynamics of monopoly finance capital.
Leave aside the questions concerning whether Lenin’s analysis is accurate or coherent. The point here is to understand his exposition, to understand what he says. In that respect, we must try to understand him in faith with his method (see section on method above). When we do, we can read the summary of his argument to this point of “Imperialism as a special stage of capitalism” (1916, pp. 699-708) more accurately and harmoniously with his method of presentation of the results of his method of enquiry. Again, a long quotation will be most fruitful:
Imperialism emerged as the development and direct continuation of the fundamental characteristics of capitalism in general ... [but] capitalism only became capitalist imperialism at a definite and very high stage of its development ... [The] main thing in this process is the displacement of capitalist free competition by capitalist monopoly ... replacing large-scale by still larger-scale industry ... [Hence,] imperialism is the monopoly stage of capitalism ... [in which] finance capital is the bank capital of a few very big monopolist banks, merged with the capital of the monopolist associations of industrialists ... [It marks a] transition from a colonial policy which has extended without hindrance to territories unseized by any capitalist power, to a colonial policy of monopolist possession of the territory of the world, which has been completely divided up...
But very brief definitions, although convenient, for they sum up the main points, are nevertheless inadequate, since we have to deduce from them some especially important features of the phenomenon that has to be defined. And so, without forgetting the conditional and relative value of all definitions in general, which can never embrace all the concatenations of a phenomenon in its full development, we must give a definition of imperialism that will include the following five of its basic features:
(1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with industrial capital, and the creation, on the basis of this ‘finance capital’, of a financial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation of international monopolist capitalist associations which share the world among themselves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed. (1916, pp. 699-700; emphasis added)
Given these five causally interdependent characteristics, features, aspects or moments, Lenin is able to introduce his definition of imperialism in terms of its “economic concepts”:
Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed. (1916, p. 700)
If we recapitulate Lenin’s method (see Method above), we can observe that we have before us a rich, many-sided representation in thought of the concrete reality of imperialism. To use another Hegelian phrase, we have before us a totality (the concrete universal represented in thought). Expressed differently, Lenin’s definition offers a comprehensive, interlocking theory or representation. This explains why it is not so easy to excise bits and for it to remain Lenin’s theory. Of course, we can excise surgically, as we should do if parts of the theory are moribund, but there is a point at which the patient dies, in Lenin’s sense, and can live on only as something else.
The remaining chapters of Imperialism deal with “the historical place of this stage of capitalism in relation to capitalism in general” and “the relation between imperialism and the two main trends in the working-class movement.” (1916, pp. 700-1) In these chapters, Lenin explicitly moves beyond the “economic concepts”, so we can leave the discussion of the text at this point.
References
Amsden, A.H. 1987, Imperialism, in The New Palgrave: Marxian Economics, pp. 205-17, from Eatwell, J., M. Milgate and P. Newman eds. The New Palgrave: A Dictionary of Economics, Macmillan, London.
Barratt Brown, M. 1972, A Critique of Marxist Theories of Imperialism, in R. Owen and B. Sutcliffe eds. 1972, Studies in the Theory of Imperialism, Longmans, New York..
Doughney, J. 2016, Problems in Marx’s Theory of the Declining Profit Rate, in J. Courvisanos, J. Doughney and A. Millmow eds. 2016, Reclaiming Pluralism in Economics, Routledge, London.
____ 2025 forthcoming, Surplus Profits, Surplus Capital, Capital Exports and Imperialism?
Gordon, D.M. 1987, Distribution Theories, in The New Palgrave: Marxian Economics, pp. 129-40, from Eatwell, J., M. Milgate and P. Newman eds. The New Palgrave: A Dictionary of Economics, Macmillan, London.
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