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

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  Financial Capital, Imperialism and War 
Imperialism as the last stage of capitalism

From Alexandr Koh, Financial Capital 1927

Hence an essential contradiction arises which threatens the capitalist system with inevitable destruction.

The productive forces of the world have reached such a high level that production can only exist in the form of world production. A strict division of labor develops between the individual countries of the world, which makes absolutely necessary the free exchange of substances between them. Free international trade, free flow of capital and labor from one country to another becomes a condition without which no country in the world can exist.

The inviolability and continuity of international relations is becoming a necessary condition for the possibility of reproducing the world's productive forces.

A single world economy requires a single economic organization.

Meanwhile, the organization of the economy under the system of finance capitalism and imperialism remains inevitably fragmented. The world economy is divided into a number of state associations, each of which, guided by the interests of competition, pursues a protectionist policy, fences itself in with a customs wall, and in every possible way hinders the free exchange of substances between individual states.

The world economy requires a unified organization. However, we have seen that capitalism is unable to create such a unified system by peaceful means. In the ruins of capitalist society, there is only one means by which it tries to create a single world economic organization. This tool is war. 

From a certain point of view, every imperialist war is an instrument of capitalist concentration. The goal of any war is to eliminate one competitor or a number of competitors from the world market. The war should reduce the number of states taking part in the world competition and expand the limits of each of the lagging states.

As a result of wars, the number of states dividing the world economy among themselves must decrease until, finally, one state covers the whole world. Imperialist wars are thus an attempt to create a single capitalist organization of the world economy, an attempt to eliminate the basic contradiction between the level of the productive forces of the world economy and its capitalist superstructure.

It is not difficult, however, to see that all these attempts are doomed to failure in advance.

An attack on one major power or another inevitably draws all the major powers of the world into the war. Under such conditions, the destruction of one of the competitors by military means becomes completely impossible. A war between two major competitors will inevitably turn into a war between coalitions of the largest states in the world.

If we take into account that each of these powers has colossal economic and military power, it becomes quite clear that such a war cannot be short-lived, it inevitably turns into a long, stubborn, and fierce struggle.

This protracted nature of modern imperialist war makes it completely unsuitable as an instrument of capitalist concentration. War has been tearing the world economy apart for an extended period of time, interrupting international relations for a number of years. Meanwhile, we have seen that the continuity of international relations is an indispensable condition for the existence and development of modern states.

By the mere fact that the war is connected with the rupture of international relations, it leads the world economy to ruin. Industrialized countries are deprived of sufficient quantities of raw materials and foodstuffs and consequently reduce their production. The agrarian countries are experiencing a shortage of agricultural machinery and other industrial products.

This exhaustion is increased all the more because war requires a colossal unproductive waste of valuables. The industry of all countries of the world during the war expands the production of items of military equipment at the expense of civilian consumption items.

An increasing part of the labor of the whole world is spent on the production of cannons, machine guns, military airplanes and ships, poisonous gases, barbed wire, and other items that perish irrevocably on the battlefield.

Enormous armies consume tens of millions of poods of grain and meat, wear out an incalculable amount of footwear uniforms, etc., while they themselves produce absolutely nothing.

The losses of the world economy caused by a protracted war are seen in the example of the last imperialist war.


To this number must be added, of course, the huge armies that had to be kept under arms, just in case, by the neutral countries.

Further, here we must add tens of millions of workers who during the war in all countries were employed in enterprises working "for defense."

A good 90,100 million people were thus cut off from peaceful production. Of the 63 million mobilized, mankind has lost: 10.2 million killed and 21 million wounded.

However, this does not exhaust the loss of humanity. The ebb of a huge number of men to the war led to a colossal reduction in the birth rate. The malnutrition and disease that accompanied the war caused a severe increase in mortality. The reduction in the birth rate is determined by 21 million people, the increase in mortality by 6,000,000.

In total, mankind lost 37 in the war. The war cost the Entente powers 510 billion gold marks (or about 350 billion gold rubles).

The war caused a reduction in all major industries, as evidenced by the following table:


If we do not take into account the accidental large wheat harvest in 1918, but judging by all the war years, it will turn out that only steel production gives an increase during the war. This increase is equal to 2.5 million tons.

If, however, we take into account that tens of millions of tons of steel, cast iron, and coal were used for military needs, it becomes clear that the peaceful consumption of these items has been greatly reduced.

Production in Europe was especially hard hit, as can be seen from the next plate.


The matter cannot, however, end in war alone.

As we have already pointed out, in the imperialist struggle, entire groups of states are fighting on both sides of the trenches. Even if, as a result of a war, the capitalist world succeeded in completely destroying one of the contending groups, then even in this case the capitalist economy would not be concentrated in the hands of a single subject and armed competition would not cease.

In the course of the war, the uneven development of capitalism is exacerbated.

Some countries suffer more from war, others less. At the same time, countries that do not take part in the war or participate in it only indirectly grow richer and begin to develop intensively.

New competitors emerge from among these countries. Individual members of the coalition must inevitably clash with each other or with newly born competitors.

The first war must be followed by a second, the second by a third, and so on. The power of the adversaries who clash with each other in armed conflicts must increase from time to time, and at the same time, wars must become increasingly destructive.

Entering the era of finance capital, humanity thus entered the era of periodically recurring wars.

And the era of wars inevitably leads to a halt in the process of development of the productive forces, for any progress of the productive forces, any accumulation of the power of mankind in relation to nature is brought to naught by the subsequent war.

From a progressive system facilitating the constant development of the productive forces, capitalism in the era of imperialism is transformed into a system that hinders the development of the productive forces and retards the difference of mankind.

Monopoly capitalism is a class system, a system built on the intensified exploitation of the proletariat and the multimillion colonial peasantry. Arousing the hatred of the vast majority of the population of the world, it is able to hold out only so long as all the forces of powerful state apparatuses are concentrated on suppressing any discontent on the part of the oppressed masses.

The era of war brings this system out of balance. It increases the dissatisfaction of the working masses, demanding from them, in addition to the usual hardships, colossal human sacrifices and eliminating even the appearance of "concerns" of the metropolises about the colonies. At the same time, wars divert the forces of the capitalist states to interstate struggle and in every possible way undermine the apparatuses of oppression of all the capitalist groupings participating in the war.

Capitalism succumbs to the blows of the proletarian revolution and national uprisings much earlier than it has time to arrive at a single organization of the world economy.

It is not capitalism that is destined to create this organization, but the social system that is coming to replace it and whose ghost has long hovered not only over Europe, but over the whole world.