Financial Capital, Imperialism and War-Imperialism as a policy of financial capital.

Marx-Engels |  Lenin  | Stalin |  Home Page

  Financial Capital, Imperialism and War 
Imperialism as a policy of financial capital.

From Alexandr Koh, Financial Capital 1927

The pacifist "Marxists", led by Kautsky, while paying tribute to the humane indignation against the military policy of recent decades, nevertheless believe that imperialism is not an inevitable companion of finance capitalism. They are engaged in composing wise projects, during which “peaceful” competition in the world market would become possible. However, they forget that life is not subject to good wishes, that elemental laws do not depend on the will of good old people.

Whether the “Marxists”, who emasculate all of its revolutionary content from Marx’s theory, wish it so, or not, the actual subjects of the world economy, the actual participants in world competition, are the capitalist organizations, uniting in their hands both the economic and political life of the peoples, relying both on the economic and military power of entire countries. It is not surprising that in the fierce struggle for mastery of the markets, they use all the means available to them.

No competitor gives up until he has used all the means of resistance at his disposal. That is why the decisive method of competition in the world market is war.

The process of concentration of capital on a global scale is unthinkable without long and inevitably repeated wars. War here is an instrument for the concentration of capital, and by no other means can the process of concentration of capital on an international scale be carried out in conditions where the economic organizations of the bourgeoisie are fused with its political organizations.

Also unthinkable is the consistent centralization of capital on a world scale, through the creation of stable world capitalist associations. World monopoly associations were already in existence before the war. Thus, the trade in aluminum, which plays a very important role in military affairs (especially in aviation), was in the hands of a single trust. An international syndicate (consisting of German and S.-American enterprises) also monopolized the entire world zinc market was divided into spheres of influence (between the Rothschild, serving Europe, and the American syndicate) the world nickel market.

The platinum syndicate concentrated in its hands not only world trade, but also the entire world production of platinum. On the eve of the war (in September 1913), an international cartel of steel and iron was formed - the Iron and Steel Institute, which covered all the countries producing steel and iron, but did not have time to show itself, as it existed only 10 months.

The International Rail Syndicate united in its hands 1/5 of the entire world production of rails. Maritime shipping was also dominated by an international syndicate. Before the war, the electrical industry of the whole world was dominated by two huge trusts: the German "General Electricity Company" and the American "General Electric Company".

These two trusts entered into an agreement between themselves in 1907, according to which markets were divided between them and competition was eliminated.

A number of international associations still exist today.


We see, therefore, that some of the international associations are creating an elaborate organization. However, despite this, we argue that the centralization of capital on a world scale is extremely difficult and limited.

The main obstacle on this path lies in the law of uneven development of capitalism.

Capitalism always develops unevenly. However, in the era of imperialism, when all the contradictions of capitalism are revealed with particular clarity and sharpened to an extreme degree, this law operates with particular force.

In the era of imperialism, we observe a slowdown in the rate of development of the oldest industrialized countries.

This slowdown stems from three main sources:

1) The presence of old industrial equipment in these countries makes it difficult for them to improve the production apparatus. With the advent of new, improved machines and devices, the capitalists of these countries cannot immediately scrap all the old equipment of enterprises. Only as old machines wear out can they gradually replace them with new ones. Moreover, the higher the organic composition of capital (and, as we know, it rises in the course of capitalist development), the slower is the replacement of old equipment with new.

 2) The spread of monopolies in the most advanced capitalist countries, as we have seen, weakens the incentives for the improvement of technology and gives rise to a tendency towards the technical decay of capitalism.

3) The very essence of finance capitalism leads to the fact that the vast masses of surplus value, extracted by the capitalists of the most powerful capital countries from the exploitation of the proletariat and numerous colonies, are invested in the industry of these countries to a lesser extent and are exported abroad in greater quantities in the form of capital.

This causes a tendency to turn the most economically powerful powers into rentier states.

On the other hand, backward countries that are just embarking on the path of capitalist development show a much faster pace of industrial growth. The import of capital from abroad gives rise to ever greater investments of capital in industrial enterprises, railways, etc.

The absence of old equipment makes it possible to build enterprises using the latest technology.

The combination of high technology with cheap labor stimulates the rapid growth of capitalism.

In the course of capitalist development, there is a constant change in the share of individual capitalist states in the world economy. First one, then another country suddenly begins to develop an increased pace of development and is put forward among the leading countries of the world.

Thus, in the decades leading up to the war, Germany not only went through a rapid transformation from an agrarian to an industrial country, but in many respects surpassed England, that classical country of capitalism. The United States of America, until recently a backward agrarian country, has outstripped both England and Germany in its capitalist development.

Agrarian Japan has also come to the fore among the first-class imperialist powers.

In the post-war period, Canada, Australia, South America, India, and to some extent China, showed a frantic pace of capitalist development, which in their development threaten to overtake and overtake the European countries.

These constant shifts in the correlation of forces of the capitalist states lead to a sharp intensification of imperialist emulation and are one of the main causes of imperialist wars.

They also make any stable international associations of capitalists inconceivable.

 When a world association is formed, the markets are distributed among the participants in proportion to the capital of each of the parties included in the association. Meanwhile, individual countries are developing at different rates. While the economic power of some countries is developing very slowly, other countries are developing, indeed, by leaps and bounds. Hence the need for a constant revision of the shares of each individual country in world production, which causes inevitable discord between the participants in international associations and their inevitable collapse.


The formation of international associations does not eliminate arms competition.

On the contrary.

It in itself is a stimulus to the strengthening of armaments. The fact is that, when an international syndicate is formed, the distribution of markets and shares of participation in world trade is based not only on the economic, but also on the military power of individual participants.

Therefore, upon conclusion of an agreement, each participant, in order not to lose his share and, if possible, to increase it, is forced to increase his military might.

The moment he is strong enough to renegotiate the agreement in his favor, he presents the syndicate with ultimatum demands and, if they are not satisfied, blows up the syndicate.

Thus, international syndicates, firstly, are not very strong and, secondly, are powerless to stop competition in the world market.

International trusts are somewhat stronger; however, they find a very weak distribution for themselves, because they encounter almost insurmountable obstacles in the way of their formation. The formation of a trust is possible only if the profits of individual participants do not decrease but increase during its formation.

Meanwhile, in modern capitalist society, divided into parts by customs walls, the rate of profit in individual countries is far from being on the same level. In backward countries, as a rule, the rate of profit is much higher, while in developed countries it is lower. When enterprises merge into a single trust, profits are usually distributed among individual participants in proportion to the capital invested by them. However, here such a distribution would be extremely disadvantageous for the capitalists of the backward countries and extremely advantageous for the capitalists of the advanced countries.

That is why not all capitalists agree to the formation of international trusts, and these organizations do not find wide circulation. Not a small obstacle is also the uneven development of technology in different countries and the resulting inequality in the organic composition of capital.

The elimination of military policy from the system of modern capitalism, therefore, turns out to be completely unthinkable.

War remains the decisive method of concentrating capital on a world scale; imperialism remains the inevitable policy of finance capital.