Imperialism, the Highest Stage of Capitalism



Rating: 5/5

Time to read: several hours

Difficulty level: Intermediate

This fairly short book contains an enormous amount of information, as Lenin explores the depths of the newly achieved global stage of capitalism. With a thorough and enlightening analysis, Lenin’s work regarding imperialism continues in relevance today, with his conclusion holding true one century later: that imperialism is in fact the highest stage of capitalism.

This book is an excellent read for anyone who wishes to understand what imperialism truly is, rather than the bourgeois definition of it which is propagated endlessly through mainstream media. As Lenin dedicates an entire book to this topic, you will walk away with a deeper and more nuanced understanding of the workings of the current system of capitalism. You may note how Lenin’s conclusions still hold today, as well as a glimpse to the tremendous power monopolies have concentrated over the years since the publication of this book. The language as well as the concepts can be a bit difficult to read and understand, but if you set aside enough time to fully delve into it, it is well worth your time.

I rate this work 5/5 based on Lenin’s profound research and analysis, as well as its high relevance today.



Finance capital: the merging of bank and industrial capital, to be controlled by the banks and used by the corporations

Imperialism: the highest stage of capitalism; marked by several developments in capitalism, such as the replacement of free competition with monopolies, the dominant role of banks, the exportation of finance capital, and the complete territorial division of the world into the control of a handful of monopolies.

Socialization of production: bringing workers together in the production of commodities in order to maximize profits

Superexploitation: paying workers literally just enough to survive; this is the practice of corporations employing people in the third world, in order to reap the maximum amount of profit



At the turn of the 20th century, capitalism was amidst a change in its nature. It had advanced to a qualitatively higher stage due to the increasingly vast concentration of capital in the hands of a few corporate leaders. Namely, this was the beginning of the domination of monopolies and therefore the end of free competition, which reigned the earlier stage of capitalism. With such high concentrations of capital under the control of a single corporation, the bourgeoisie could reinvest a much larger amount of their revenues back into their companies. However, because of this, the market in their home country was no longer as profitable as it used to be. So, these corporate magnates needed to expand production in order to make more profits. Since they could not expand any further within the boundaries of their own country, they did the only logical thing–they looked to the international markets.

Although colonization was fairly common before the advancement of capitalism to imperialism, it became much more intensified following this leap. This is when the major powers in europe divided the entirety of the continent of Africa among themselves in the late 1800s–each colonizing country would be able to monopolize and thus secure high profits for their corporations in their respective colonies without fear of competition from the other monopolies. So, all of the european powers temporarily untied (something quite uncommon at that time) in order to secure the most profitable deals for each country’s industries through the territorial division of the world. Of course, the alliance among the imperialist powers proved to be short-lived. As soon as a colony became too restrictive for the expansion of the monopoly, the capitalist would begin to set its eyes on another, more profitable territory. The encroachment of one monopoly into the territory of the other is grounds for war, with one monopoly coming out on top and centralizing the losing monopoly’s territory, furthering the concentration of capital. Thus, there is no such thing as a lasting peace between the imperialist powers, even today. Sooner or later, the current established order will become unprofitable for a number of imperialists, and thus inter-imperialist war will ensue.

A major change with all of this–the leap from free-competition capitalism to monopoly capitalism (or imperialism)–was the growing export of capital as opposed to commodities. When free competition was the dominant aspect of capitalism, corporations focused on the export of commodities to their country’s colonies. However, with the advancement of imperialism, it was found to be much more profitable to export capital in the form of high-interest loans to the colonized countries in order to develop and expand capitalist relations to the benefit of the corporations. Basically, these monopolies would loan money to the colonized countries in order for them to build and develop industries and the infrastructure necessary for the production of these industries (railroads are a famous example of this). However, something that modern-day apologists for colonialism seem to conveniently forget is that these loans were never a good deal for the colonized country, and instead were highly profitable for the monopolies in the colonizing countries. Think of it like this–the whole reason for these loans is for the monopolies to increase and expand their capital by reaping more profits. Therefore, they would not intentionally make a deal that would be unprofitable for them, and, ultimately, if the deal was profitable for the corporation making the loan, then it would be extremely unprofitable for the receiving end of this loan (i.e. the colonized country). On top of this, the monopolies would buy and own the newly constructed infrastructure in the colonized country and begin the superexploitation of the colonized population in order to reap the maximum possible amount of profit. Thus, from one loan, the monopolies would profit doubly–once from the interest on the loan, and again from the usage of the industries which were created by the loan to superexploit the population.

However, all of this would not be possible without one key advancement in capitalism–namely, the rise of the banks. Banks play a crucial role in all of this: they are the ones that give loans and credits to corporations in order for them to expand their production; they control the accounts and finances of the monopolies; they are ultimately in control of what the corporations do. Because of all of this, it can be said that banks sit at the apex of imperialism, as they are the funders and controllers of the monopolies. How did this happen? Monopolies need investors, loans, and credit in order to remain competitive with other monopolies in their industries and to prevent the rise of smaller businesses. Each of these alone may not be enough to render the monopoly completely dependent on a bank, but put together, it creates a dangerous combination of dependency of the corporations. For example, when banks know each monopoly’s relative economic position–and thus have much better insight to which markets will be the most profitable–it could be very advantageous for corporations to have this foresight. However, if a corporation for some reason chooses not to be connected to a bank, they will lose this advantage and fall behind in competition. Additionally, as corporations take out more and more loans to compete with other businesses, and banks invest more into these corporations, they fall more reliant on banks. This comes to the point where, if a corporation does not obey the will of the bank, the bank could simply withdraw its investments and the corporation would come crashing down. Lenin gives an example of this in the book where, an entire syndicate was threatened with complete economic destruction upon not taking the “advice” of the bank.

This tyranny is achieved through several ways, some of which are more obscure than others. As mentioned before, banks exercise more subtle domination through the control of stocks, investments, and loans. However, in a more blatant method of control, banks will have members of their Board of Directors on the Board of Directors of the industries they control, in which they make direct decisions in what the corporation does. On top of all of this, banks will also hire former civil servants to sit on their Board of Directors in order to forge better relations with the government of their country. To this end, political alliances between various countries are generally a result (i.e. they come after, not before) of cooperation between monopolies from the countries involved.

A key product of all of this is the formation of finance capital. This is the merging of industrial capital with bank capital, with the bank having control over this capital and the industries employing it. This simply means that banks control industries through loans, investments, and credits (bank capital), and, combined with the capital produced by the corporations themselves (industrial capital), this is then used by the corporations to expand production in whatever way is profitable to the banks. This allows for the acceleration of the concentration of capital, in which the banks can quickly move finance capital around to whichever business is the most profitable for them. Similarly, banks can deprive an industry of capital if it’s existence is unprofitable for the bank (e.g. if two corporations the bank is invested in are competing, then the bank can withdraw all investments from one corporation and end its existence to the benefit of the other corporation and, ultimately to the benefit of the bank, as they get a higher return from their investments).

At this point, it may be important to note the implications of such a system. Mainly, how the dominance of imperialism has given rise to an entire class of rentiers. Basically, with the export of capital and dominant role of banks, there is an entire section of the ruling class that reaps enormous profits simply from interest on loans and returns on investment. The rentiers are almost entirely separated from the process of production, and do not make any real contributions to society. These are truly the capitalist leeches, who benefit the most from imperialism and live off of the backs of the people of the third world. To this end, since their existence is tied up with the existence of imperialism, they will do anything within their power to continue such a predatory system. A key tactic, for example, is the bribery of workers in their home country to prevent revolt. This gives rise to the labor aristocracy, or the better off workers in imperialist countries whose higher wages are meant to stave off revolution and thus maintain the dominance of imperialism.

Thus, because all of this, imperialism is said to be the highest stage of capitalism. Why? Because productive relations cannot be any further socialized in the world. Imperialists have turned the entire globe into one assembly line, with a global division of labor. Many of the products we own come from a handful of countries now rather than just one factory. This could not have been possible without imperialism, exporting capital to develop capitalist productive relations in colonized countries in order to bring about the most profits. However, this is a double-edged sword for the imperialists. True, pulling in the entire world into the fetters of capitalism and exploitation is extremely profitable for the monopoly magnates. However, the increased socialization of production also means that the entire system of capitalism will fall sooner rather than later. Capitalism brings the formerly isolated and independent workers under feudalism into close contact with one another in exploitative relations. For the bourgeoisie, their is nothing more threatening than workers uniting and learning about their exploitation. So, imperialism can be said to be the transitory stage from free market capitalism to socialism, from a relatively lower socialization of production to complete socialization of production. For this reason, since imperialism is the highest stage of capitalism, that means it is all downhill for capitalism. Thus, imperialism is capitalism on its deathbed.



What is Imperialism?

  • There are five essential features of imperialism:
    • High concentration of capital that led to the formation of monopolies
    • The formation of international monopolies that divide up the world amongst themselves to reduce competition
    • The utter and complete territorial division of the world among the leading capitalist powers (89)
    • The merging of bank capital and industrial capital to form finance capital, and thus a ruling financial oligarchy
    • The export of capital as opposed to the export of commodities
  • Monopoly (and therefore imperialism) is the latest phase of capitalist development (30)
  • Imperialism is the highest stage of capitalism, as capitalist productive relations are extended to a global scale and incorporate the world’s population in the production of commodities (59)
  • As competition transforms to monopoly, the socialization of production increases at an immensely faster rate (25)
    • Thus, imperialism serves as the transition stage from complete free competition (early capitalism) to complete socialization of production (socialism) (25)
    • Production is social, but appropriation of profits and ownership of means of production remains private (25)
      • As fewer and fewer people own the means of production, competition between these few enormous enterprises intensifies at the expense of the workers of the world (25)
  • Under the previous form of capitalism, dominated by free competition, the export of goods prevailed. Today, under the new form of capitalism, where monopolies are dominant, the export of capital is the typical feature (62)
    • The export of capital greatly accelerates the development of capitalism in the target country (65)

The Rise and Dominance of Monopolies

  • The entire system of free competition has been replaced by monopolies (21)
    • A monopoly exerts vast amounts of control and affects every sphere of public life (58)
  • There are several methods and practices by which monopolies maintain their dominance over smaller enterprises:
    • Stopping the supply of raw materials
    • Stopping the supply of labor through the formation of alliances (trade unions only allowing their members to work with monopolized companies)
    • Cutting off deliveries
    • Closing trade outlets
    • Agreements with buyers (buyers agree to only buy from monopolized companies)
    • Systemic price cutting below a profitable value (in order to ruin non-monopolized firms that cannot reduce their prices for a long period of time)
    • Stopping credits
    • Boycott (26)
  • There is no longer competition between small and large-scale industries–simply the forced submission of small-scale to large-scale (26)
  • Capitalism has reached the point where the speculative industry tycoon triumphs over the small business owner who better understands the needs of their customers (26)
    • At the basis of commodity production no longer lies any notion of “free competition,” but rather the masters of financial manipulation to whom goes the immense profits brought about through socialized labor (27)
  • With the increase of monopolies and thus decrease in competition, incentive to progress declines, and so monopolies may intentionally slow the development of a product over a period of time to reap the most profits (99)
  • Capitalism’s transition to monopoly capitalism is bound up with the intensification of the struggle of the partition of the world into the hands of a few capitalists (78)
  • Through the increased export of capital and colonialism, international agreements were formed amongst the monopolies to create international monopolies to be able to concentrate capital at a higher level (68)
    • Colonization helps monopolies retain dominance in colonized regions, free from competition (82)
  • In 1907, german and american monopolies reached an agreement to divide up the world amongst themselves, so they would no longer have to compete with one another (70)
    • Political alliances are often created between states based on economic pacts forged between monopoly capitalists (75)
    • It is easy to imagine how difficult it would be to have to compete against such a monopoly that exerts so much power and influence over the world (70)
  • Capitalists do not form monopolies because they’re “evil;” rather, it’s because the system of capitalism forces the capitalists to develop in such a way to procure a profit and remain competitive (75)
  • A handful of monopolists control all of the capitalist operations, both commercial and industrial. Through their banking connections, they can first figure out exactly the other position of competing capitalists, and eventually control them through the restriction or enlargement of banking credits (35)

The Role of Banks and Finance Capital

  • Banks and financial institutions have gained the lead role in the new stage of imperialism by standing at the head of monopoly blocs. This came about through the merging of industrial and bank capital into finance capital (31)
  • The turn of the 20th century marks the transition from old capitalism–with the dominance of larger amounts of capital over smaller amounts–to the new stage of capitalism, which is marked by the domination of all capital under finance capital (46)
    • “Finance capital is capital controlled by the banks and employed by the industrialists.” (47)
    • The vast concentration of production and capital has led to the formation of monopolies, which in turn gave rise to the unification of banking and industry, which is responsible for the creation of finance capital (47)
    • The non-economic superstructure which grows off of the basis of finance capital ensures the maintenance and reproduction of finance capital (84)
    • Finance capital will attempt to grab up any piece of land–not necessarily for its own benefit, but so another imperialist power doesn’t gain it (92)
  • The consolidation of banks under the power of a few men will likewise bring about a similar trend in other industries, as they come under the control of the banks and operate in whatever manner that is profitable to the banks (36)
    • Banks accelerate the process of concentration of capital and formation of monopolies within every capitalist country (37)
    • The increasing concentration of banks into the hands of fewer and fewer people has resulted in the increased dependence of large industries upon these banks, as they have fewer options from which to get credit/loans from to remain competitive (41)
  • The small day to day tasks the bank completes for large industries do not diminish the autonomy of the large industries; rather, it’s the compilation of these tasks on top of managing the funds of the industries and allowing the banks to know each industry’s relative economic position increases its dependence (41)
  • A close relationship is established between the banks and the largest industrial and commercial enterprises, through the acquisition of shares and the appointment of the bank directors to the Board of Directors of the corporation and vice versa (41)
    • In 1910, 51 of the biggest manufacturers were on the Supervisory Boards of the largest six banks in Germany; this phenomena could be found throughout every imperialist country (42)
    • Civil servants–both former and current-standing–are also often seated on the Supervisory Boards of the largest banks, who hold personal connections to high ranking governmental officials in order to facilitate relations with the government in the favor of these monopolies (42)
  • Industrial and commercial businesses often complain of the “terrorism” of the banks in controlling their enterprises in whatever way that favors the bank (44)
    • If an industry doesn’t comply with the will of the bank that it relies on, the bank will simply withdraw its credit/investment from the industry, and the business will come crashing down (45)
    • In the past, smaller businesses would complain about the dominance of larger businesses; now, all businesses–large or small–are subject to the rule of banks (45)
    • Banks will intentionally destroy certain businesses if their interests don’t align (57)

Predatory Nature of Imperialism

  • Loan capital takes the form of government loans and can be termed “usury imperialism.” (65)
  • Imperialism and monopolies result in the immense growth of a predatory class that lives solely off of interest from loans, living as a leech off of their clients and taking no part in the process of production (100)
    • Thus, the essence of imperialism is the formation of a few “rentier” or usurer states that dominate and live as a leech off of the rest of the world (101)
  • The industrial powers of the world have developed into the creditor powers of the world (101)
  • The imperialist powers survive through “economic parasitism,” in which their ruling class is thoroughly enriched off of the backs of the third world, and can thus give concessions and bribe sections of the working class in their home countries to stave off revolution and maintain power (102)
    • Imperialism creates privileged sections of the working class detached from the masses through bribery by the ruling class, to the end of dividing the working class and encourage opportunism (i.e. taking bribes and increased wages from the bourgeoisie as opposed to fighting for the destruction of the bourgeoisie) and thus decay in the revolutionary working class movement (106)
    • Thus, through the mass exploitation of the third world, sections of the ruled class become part of the ruling class in imperialist countries by living as a rentier off of the third world; simultaneously, sections of the working class are bought out by the imperialist bourgeoisie and another section of the proletariat follow these opportunists to fight for concessions as opposed to revolutionary change (107)
  • The percentage of the population involved in the production of goods (i.e. as opposed to rentiers) is steadily declining in imperialist countries (105)

Effects of Imperialism

  • Every new enterprise that wishes to compete with the dominating enterprises has to produce such a large amount of commodities with which it must either sell them all profitably or force down the prices at a harmful effect to itself and other monopolist enterprises (19)
  • Nearly the whole world is in debt to the banking magnates of england, france, united states, and germany (61)
  • The wars amongst the imperialist powers determine which of the powers receives the largest portion of financial gain (11)
  • A lasting peace amongst imperialist powers cannot exist: peace is only a temporary period in which the imperialist powers are relatively equal. Overtime, the monopoly blocs within each respective imperialist country will need to expand further in order to remain competitive and profitable, and this expansion can only come at the expense of other imperialist powers, creating war (119)
    • Wars grow out of peace; the conception of peace can only be possible with the conception of war. Thus, peaceful alliances between the imperialists are only temporarily truces in between wars (119)
      • Periods of imperialist peace bring about periods of imperialist war (120)
  • As long as capitalism is the dominant mode of production, surplus capital will never be repurposed for the betterment of the conditions of the masses, as this would mean a loss of profits and therefore a loss in competition (63)
    • Imperialism brings about heightened resistance by the oppressed people, who will eventually bring about the end of the imperialists themselves (121)
      • Imperialism can ultimately be described as decaying capitalism, lying on its death bed (126)

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