Question

In Lenin, why do developed economies export capital? What are the roots of imperialism? How does capitalism give rise to the need for imperialism? To what extent Lenin's theory explains the first half of the 20th century?

Answer 1

At its highest stage of development, once labor power itself becomes a resource, capitalism is commodity output. Capitalism's characteristic feature is the growth of internal trade, and particularly of international exchange. Under the capitalist system, the unstable and spasmodic growth of individual companies, individual industries and individual countries is unavoidable

Before any other, England became a capitalist country, and by the mid-nineteenth century, having adopted free trade, claimed to be the "workshop of the world," the supplier of manufactured goods to all nations, in exchange for keeping it supplied with raw materials. But this monopoly has already been broken in the last quarter of the nineteenth century; for other nations, sheltered by "protective" tariffs, it has grown into autonomous capitalist states. At the threshold of the twentieth century, we see the formation of a new type of monopoly: first, bourgeois monopoly alliances in all capitalist developed countries

So long so capitalism remains what it is, surplus capital will be used not to raise the standard of living of the people in a given country, for this would mean a reduction in income for the capitalists, but to increase profits by exporting capital to the backward countries. Profits are usually high in these backward countries, since capital is scarce, land prices are relatively low, wages are low, raw materials are cheap.

Lenin's main objective in imperialism was to demonstrate how in the late 19th and early 20th centuries the colonial expansion and imperialist competition were rooted in profound changes in the nature of capitalism during the same period. That's why, at the start of the 20th century, he called colonialism a phase of capitalism.

By naming it a phase of capitalism, Lenin said that a fundamental economic trend was the new imperialism. Lenin's argument was that the rivalries and wars between capitalist powers were inherent in one of the basic features of capitalism: the tendency for capital to become more centralized and concentrated that is, for the dominant capitalist firms to acquire monopoly or near monopoly status in specific sectors of their national economy. Competition tends to result in the concentration and centralization of capital, and as this process develops, the state becomes more and more active in managing the economy. Indeed, there is a tendency for capital and the state to merge at national level into what it calls "state capitalist trusts."

By contrast, the theory of Lenin does a remarkably good job of explaining capitalism's development in the first half of the 20th century, and why the major capitalist powers plunged the globe into two catastrophic and barbaric world wars.

The nature of global politics changed dramatically after World War II. The world had been economically and politically multi-polar before the war. This remained economically multi-polar after the war, but became strategically polarized, creating two competing global military alliances, one led by the U.S., and the other by the U.S.S.R.

The global capitalist system is functioning more and more at the beginning of the 21st century in line with the theory of colonial competition that Lenin first defined almost a hundred years ago.

What Lenin was trying to explain was the increasingly virulent form of colonialism which began to emerge in the late nineteenth century, resulting in the 1880s scramble for Africa, and the growing tension between the major powers which eventually led to world war.