Finance Capital and Capitalist Imperialism

Marx implied that the spiral of ever-intensified competition among capi­talist industrial units would culminate in "finance capital" and "capitalistic imperialism." In Marx's tracing of the "historical tendency of capitalist ac­cumulation," "the monopoly of capital becomes a fetter upon the whole of production." Moreover, "hand in hand with this centralization or this expropriation of many capitalists by the few," Marx foresaw "the en­tanglement of all peoples in the net of the world market" and the creation of the "international character of the capitalistic regime."

Monopolistic Nature of Finance Capital

To Lenin, who expounded upon this portion of Marxian theory in some de­tail, the stage of capitalist development that he termed "finance capital" is characterized by the evolution of two sets of circumstances:

1. The concentration of production and capital, 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.
Thus "capitalist monopolies" would replace "capitalist free com­petition."

Monopoly is the direct opposition of free competition; but we have seen the latter being transformed into monopoly before our very eyes, creating large-scale production and squeezing out small-scale pro­duction, replacing large-scale by larger-scale production, finally leading to such a concentration of production and capital that monopoly has been and is the result; cartels, syndicates and trusts, and, merging with them, the capital of a dozen or so banks manipulating thousands of millions.
In such a stage of capitalist production, the capitalist himself reaches the highest possible degree of parasitic existence. The control over produc­tion resides in liquid funds of money and credit. These are manipulated through monopolistic industrial units to squeeze out of the capitalist pro­cesses of production not only surplus value but monopolistic surplus value. The capitalist and the control he exercises in the stage of finance capital have lost the last vestiges of any functional connection with the actual pro­duction of goods possessing use value.

Transition to Capitalistic Imperialism

Finance capital reaching out beyond the boundaries of a single capitalist country becomes "capitalistic imperialism." Lenin suggests the following as steps in this transition:

The export of capital, as distinguished from the export of commodities, becomes of particularly great importance.
International monopoly combines of capitalists are formed which divide up the world.
The territorial division of the world by the greatest capitalist powers is completed.

The stage of capitalistic imperialism cannot exist until finance capital becomes dominant domestically—that is, until capital comes to assume the money or credit forms in which it can easily transfer its residence from one country to another. Although capitalistic imperialism "undoubtedly represents a special stage in the development of capitalism, ... it would be absurd to dispute . . . over the year or decade in which imperialism became 'definitely' established." In fact, the stages of finance capital and capital­istic imperialism may well arrive in various nations at various .times, "for under capitalism there cannot be an equal development of different undertak­ings, trusts, branches of industry or countries."

Capitalistic Imperialism—The Highest Stage of Capitalism

Despite the uncertainties and irregularities in the development of this stage of capitalist production, featuring an imperialistic struggle for markets and opportunities for profitable investment of finance capital, Lenin felt that it had arrived in some countries when he wrote in 1916, "We see a few im­perialist powers fighting amongst themselves for the right to share in this monopoly, and this struggle is characteristic of the whole period of the be­ginning of the twentieth century."

A year later Lenin described World War I in a similar but more vigorous tone when he wrote, "The belligerent powers, the belligerent groups of capitalists, the 'masters' of the capitalist system, and the slave-drivers of a capitalist slavery, have been shackled to each other by the war with chains of iron. One bloody lump, that is the sociopolitical life of the historic period through which we are now passing."

To Lenin, capitalistic imperialism is the "highest stage" of capitalism because it is the last. In finance capital and capitalistic imperialism, all the contradictions developed within the capitalist system of production ar­rive at their ultimate and collective climax. The mutually antagonistic in­terests nurtured by the capitalist system finally rise to such a pitch that they are self-destructive, the system itself being destroyed in the final clash. The monopolies that evolved from capitalist processes are essentially para­sitic. Under finance capital "the stimulus to technical, and consequently to all other progress, to advance, tends to disappear. ..." This puts monop­oly, which "exists in the general capitalist environment of commodity pro­duction and competition, in permanent and insoluble contradiction to this general environment." The capitalist system cannot continue without pro­duction, but the stage of monopoly or finance capital, which capitalist production itself breeds, is essentially destructive of productive forces. Thus, in Marx's words, capitalist production begets with the inexorability of a law of nature its own negation. It sets in operation monopolistic forces that "at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capi­talist private property sounds."