Imperialism, the Highest Stage of Capitalism

A POPULAR OUTLINE

VIII. PARASITISM AND DECAY OF CAPITALISM

We now have to examine yet another significant aspect of
imperialism to which most of the discussions on the subject
usually attach insufficient importance. One of the shortcomings
of the Marxist Hilferding is that on this point he has taken a
step backward compared with the non-Marxist Hobson. I refer to
parasitism, which is characteristic of imperialism.

As we have seen, the deepest economic foundation of imperialism
is monopoly. This is capitalist monopoly, i.e., monopoly which
has grown out of capitalism and which exists in the general
environment of capitalism, commodity production and competition,
in permanent and insoluble contradiction to this general
environment. Nevertheless, like all monopoly, it inevitably
engenders a tendency of stagnation and decay. Since monopoly
prices are established, even temporarily, the motive cause of
technical and, consequently, of all other progress disappears to
a certain extent and, further, the economic possibility arises
of deliberately retarding technical progress. For instance, in
America, a certain Owens invented a machine which revolutionised
the manufacture of bottles. The German bottle-manufacturing
cartel purchased Owens’s patent, but pigeon-holed it, refrained
from utilising it. Certainly, monopoly under capitalism can
never completely, and for a very long period of time, eliminate
competition in the world market (and this, by the by, is one of
the reasons why the theory of ultra-imperialism is so absurd). Certainly, the possibility of reducing the cost of
production and increasing profits by introducing technical
improvements operates in the direction of change. But the
tendency to stagnation and decay, which is characteristic of
monopoly, continues to operate, and in some branches of
industry, in some countries, for certain periods of time, it
gains the upper hand.

The monopoly ownership of very extensive, rich or well-situated
colonies operates in the same direction.

Further, imperialism is an immense accumulation of money capital
in a few countries, amounting, as we have seen, to
100,000-150,000 million francs in securities. Hence the
extraordinary growth of a class, or rather, of a stratum of
rentiers, i.e., people who live by “clipping coupons,” who take
no part in any enterprise whatever, whose profession is
idleness. The export of capital, one of the most essential
economic bases of imperialism, still more completely isolates
the rentiers from production and sets the seal of parasitism on
the whole country that lives by exploiting the labour of several
overseas countries and colonies.

“In 1893,” writes Hobson, “the British capital invested abroad
represented about 15 per cent of the total wealth of the United
Kingdom.” [1]

Let me remind the reader that by 1915 this capital had increased
about two and a half times. “Aggressive imperialism,” says
Hobson further on, “which costs the tax-payer so dear, which is
of so little value to the manufacturer and trader ... is a
source of great gain to the investor.... The annual income Great
Britain derives from commissions in her whole foreign and
colonial trade, import and export, is estimated by Sir R. Giffen
at £18,000,000 (nearly 170 million rubles) for 1899, taken
at 2 1/2 per cent, upon a turnover of £800,000,000.” Great
as this sum is, it cannot explain the aggressive imperialism of
Great Britain, which is explained by the income of £90 million to £100 million from “invested” capital, the
income of the rentiers.

The income of the rentiers is five times greater than the income obtained from the foreign trade of the biggest
“trading” country in the world! This is the essence of imperialism and imperialist parasitism.

For that reason the term “rentier state” (Rentnerstaat), or
usurer state, is coming into common use in the economic
literature that deals with imperialism. The world has become
divided into a handful of usurer states and a vast majority of
debtor states. “At the top of the list of foreign investments,”
says Schulze-Gaevernitz, “are those placed in politically
dependent or allied countries: Great Britain grants loans to
Egypt, Japan, China and South America. Her navy plays here the
part of bailiff in case of necessity. Great Britain’s political
power protects her from the indignation of her debtors.” [2]

Sartorius von Waltershausen in his book, The National Economic System of Capital Investments Abroad, cites Holland as the model
“rentier state” and points out that Great Britain and France are
now becoming such. [3]

Schilder is of the opinion that five industrial states have become “definitely pronounced creditor
countries”: Great Britain, France, Germany, Belgium and
Switzerland. He does not include Holland in this list simply
because she is “industrially little developed.” [4]

The United States is a creditor only of the American countries.

“Great Britain,” says Schulze-Gaevernitz, “is gradually becoming
transformed from an industrial into a creditor state. Notwithstanding the absolute increase in industrial
output and the export of manufactured goods, there is an
increase in the relative importance of income from interest and
dividends, issues of securities, commissions and speculation in
the whole of the national economy. In my opinion it is precisely
this that forms the economic basis of imperialist ascendancy. The creditor is more firmly attached to the debtor
than the seller is to the buyer. [5]

In regard to Germany, A. Lansburgh, the publisher of the Berlin Die Bank, in 1911, in an
article entitled “Germany—a Rentier State”, wrote the following: “People in Germany are ready to sneer at the yearning
to become rentiers that is observed in France. But they forget
that as far as the bourgeoisie is concerned the situation in
Germany is becoming more and more like that in
France.” [6]

The rentier state is a state of parasitic, decaying capitalism,
and this circumstance cannot fail to influence all the socio-political conditions of the countries concerned, in
general, and the two fundamental trends in the working-class movement, in particular. To demonstrate this in the clearest
possible manner let me quote Hobson, who is a most reliable
witness, since he cannot be suspected of leaning towards Marxist
orthodoxy; on the other hand, he is an Englishman who is very
well acquainted with the situation in the country which is
richest in colonies, in finance capital, and in imperialist
experience.

With the Anglo-Boer War fresh in his mind, Hobson describes the
connection between imperialism and the interests of the
“financiers,” their growing profits from contracts, supplies,
etc., and writes: “While the directors of this definitely
parasitic policy are capitalists, the same motives appeal to
special classes of the workers. In many towns most important
trades are dependent upon government employment or contracts;
the imperialism of the metal and shipbuilding centres is
attributable in no small degree to this fact.” Two sets of
circumstances, in this writer’s opinion, have weakened the old
empires: (1) “economic parasitism,” and (2) the formation of
armies recruited from subject peoples. “There is first the habit
of economic parasitism, by which the ruling state has used its
provinces, colonies, and dependencies in order to enrich its
ruling class and to bribe its lower classes into acquiescence.” And I shall add that the economic possibility of
such bribery, whatever its form may be, requires high monopolist
profits.

As for the second circumstance, Hobson writes: “One of the
strangest symptoms of the blindness of imperialism is the
reckless indifference with which Great Britain, France and other
imperial nations are embarking on this perilous dependence. Great Britain has gone farthest. Most of the
fighting by which we have won our Indian Empire has been done by
natives; in India, as more recently in Egypt, great standing
armies are placed under British commanders; almost all the
fighting associated with our African dominions, except in the
southern part, has been done for us by natives.”

Hobson gives the following economic appraisal of the prospect of
the partitioning of China: “The greater part of Western Europe
might then assume the appearance and character already exhibited
by tracts of country in the

South of England, in the Riviera and in the tourist-ridden or residential parts of Italy and
Switzerland, little clusters of wealthy aristocrats drawing
dividends and pensions from the Far East, with a somewhat larger
group of professional retainers and tradesmen and a larger body
of personal servants and workers in the transport trade and in
the final stages of production of the more perishable goods; all
the main arterial industries would have disappeared, the staple
foods and manufactures flowing in as tribute from Asia and
Africa. . . . We have foreshadowed the possibility of even a
larger alliance of Western states, a European federation of
great powers which, so far from forwarding the cause of world
civilisation, might introduce the gigantic peril of a Western
parasitism, a group of advanced industrial nations, whose upper
classes drew vast tribute from Asia and Africa, with which they
supported great tame masses of retainers, no longer engaged in
the staple industries of agriculture and manufacture, but kept
in the performance of personal or minor industrial services
under the control of a new financial aristocracy. Let those who
would scout such a theory (it would be better to say: prospect)
as undeserving of consideration examine the economic and social
condition of districts in Southern England today which are
already reduced to this condition, and reflect upon the vast
extension of such a system which might be rendered feasible by
the subjection of China to the economic control of similar
groups of financiers, investors, and political and business
officials, draining the greatest potential reservoir of profit
the world has ever known, in order to consume it in Europe. The
situation is far too complex, the play of world forces far too
incalculable, to render this or any other single interpretation
of the future very probable; but the influences which govern the
imperialism of Western Europe today are moving in this direction, and, unless counteracted or diverted, make towards
some such consummation.” [7]

The author is quite right: if the forces of imperialism had not
been counteracted they would have led precisely to what he has
described. The significance of a “United States of Europe” in
the present imperialist situation is correctly appraised. He
should have added, however, that, also within the working-class movement, the opportunists, who are for the moment
victorious in most countries, are “working” systematically and
undeviatingly in this very direction. Imperialism, which means
the partitioning of the world, and the exploitation of other
countries besides China, which means high monopoly profits for a
handful of very rich countries, makes it economically possible
to bribe the upper strata of the proletariat, and thereby
fosters, gives shape to, and strengthens opportunism. We must
not, however, lose sight of the forces which counteract
imperialism in general, and opportunism in particular, and
which, naturally, the social-liberal Hobson is unable to
perceive.

The German opportunist, Gerhard Hildebrand, who was once
expelled from the Party for defending imperialism, and who could
today be a leader of the so-called “Social-Democratic” Party of
Germany, supplements Hobson well by his advocacy of a “United
States of Western Europe” (without Russia) for the purpose of
“joint” action ... against the African Negroes, against the
“great Islamic movement,” for the maintenance of a “powerful
army and navy”, against a “Sino-Japanese coalition,” [8] etc.

The description of “British imperialism” in Schulze-Gaevernitz’s
book reveals the same parasitical traits. The national income of
Great Britain approximately doubled from 1865 to 1898, while the
income “from abroad” increased nine-fold in the same period. While the “merit” of imperialism is that it “trains the
Negro to habits of industry” (you cannot manage without coercion
... ), the “danger” of imperialism lies in that “Europe will
shift the burden of physical toil—first agricultural and
mining, then the rougher work in industry—on to the coloured races, and itself be content with the role of rentier,
and in this way, perhaps, pave the way for the economic, and
later, the political emancipation of the coloured races.”

An increasing proportion of land in England is being taken out
of cultivation and used for sport, for the diversion of the
rich. As far as Scotland—the most aristocratic place for
hunting and other sports—is concerned, it is said that “it lives on its past and on Mr. Carnegie” (the American
multimillionaire). On horse racing and fox hunting alone England
annually spends £14,000,000 (nearly 130 million rubles). The number of rentiers in England is about one
million. The percentage of the productively employed population
to the total population is declining:

| | Population England and Wales (000,000) | Workers in basic
industries (000,000) | Per cent of total popula- tion |
| --- | --- | --- | --- |
| 1851..... | 17.9 | 4.1 | 23 |
| 1901..... | 32.5 | 4.9 | 15 |

And in speaking of the British working class the bourgeois
student of “British imperialism at the beginning of the
twentieth century” is obliged to distinguish systematically
between the “ upper stratum ” of the workers and the “ lower stratum of the proletariat proper .” The
upper stratum furnishes the bulk of the membership of co-operatives, of trade unions, of sporting clubs and of
numerous religious sects. To this level is adapted the electoral
system, which in Great Britain is still “ sufficiently restricted to exclude the lower stratum of the proletariat proper "! In order to present the condition of the British
working class in a rosy light, only this upper stratum—which
constitutes a minority of the proletariat—is usually spoken of. For instance, “the problem of unemployment
is mainly a London problem and that of the lower proletarian stratum, to which the politicians attach little importance ...” [9]

He should have said: to which the bourgeois politicians and the “socialist” opportunists
attach little importance.

One of the special features of imperialism connected with the
facts I am describing, is the decline in emigration from
imperialist countries and the increase in immigration into these
countries from the more backward countries where lower wages are
paid. As Hobson observes, emigration from Great Britain has been
declining since 1884. In that year the number of emigrants was
242,000, while in 1900, the number was 169,000. Emigration from
Germany reached the highest point between 1881 and 1890, with a
total of 1,453,000 emigrants. In the course of the following two
decades, it fell to 544,000 and to 341,000. On the other hand,
there was an increase in the number of workers entering Germany
from Austria, Italy, Russia and other countries. According to
the 1907 census, there were 1,342,294 foreigners in Germany, of
whom 440,800 were industrial workers and 257,329 agricultural
workers. [10]

In France, the workers employed in the mining industry are, “in great part,” foreigners: Poles,
Italians and
Spaniards. [11]

In the United States, immigrants from Eastern and Southern Europe are engaged in the most poorly
paid jobs, while American workers provide the highest percentage
of overseers or of the better-paid workers. [12]

Imperialism has the tendency to create privileged sections also among the
workers, and to detach them from the broad masses of the
proletariat.

It must be observed that in Great Britain the tendency of
imperialism to split the workers, to strengthen opportunism
among them and to cause temporary decay in the working-class
movement, revealed itself much earlier than the end of the
nineteenth and the beginning of the twentieth centuries; for two
important distinguishing features of imperialism were already
observed in Great Britain in the middle of the nineteenth
century—vast colonial possessions and a monopolist position in the world market. Marx and Engels traced this
connection between opportunism in the working-class movement and
the imperialist features of British capitalism systematically,
during the course of several decades. For example, on October 7,
1858, Engels wrote to Marx: “The English proletariat is actually
becoming more and more bourgeois, so that this most bourgeois of
all nations is apparently aiming ultimately at the possession of
a bourgeois aristocracy and a bourgeois proletariat alongside the bourgeoisie. For a nation which exploits
the whole world this is of course to a certain extent justifiable.” [13] Almost a quarter of a century later, in a letter
dated August 11, 1881, Engels speaks of the “worst English trade
unions which allow themselves to be led by men sold to, or at
least paid by, the middle class”. In a letter to Kautsky, dated
September 12, 1882, Engels wrote: “You ask me what the English
workers think about colonial policy. Well, exactly the same as
they think about politics in general. There is no workers’ party
here, there are only Conservatives and Liberal-Radicals, and the
workers gaily share the feast of England’s monopoly of the world
market and the colonies.” [13] (Engels expressed similar ideas in
the press in his preface to the second edition of The Condition of the Working Class in England, which appeared
in 1892.)

This clearly shows the causes and effects. The causes are: (1)
exploitation of the whole world by this country; (2) its
monopolist position in the world market; (3) its colonial
monopoly. The effects are: (1) a section of the British
proletariat becomes bourgeois; (2) a section of the proletariat
allows itself to be led by men bought by, or at least paid by,
the bourgeoisie. The imperialism of the beginning of the
twentieth century completed the division of the world among a
handful of states, each of which today exploits (in the sense of
drawing superprofits from) a part of the “whole world” only a
little smaller than that which England exploited in 1858; each
of them occupies a monopolist position in the world market
thanks to trusts, cartels, finance capital and creditor and
debtor relations; each of them enjoys to some degree a colonial
monopoly (we have seen that out of the total of 75,000,000 sq. km., which comprise the whole colonial world,
65,000,000 sq. km., or 86 per cent, belong to six powers; 61,000,000 sq. km., or 81 per cent, belong to
three powers).

The distinctive feature of the present situation is the
prevalence of such economic and political conditions that are
bound to increase the irreconcilability between opportunism and
the general and vital interests of the working-class movement:
imperialism has grown from an embryo into the predominant
system; capitalist monopolies occupy first place in economics
and politics; the division of the world has been completed; on
the other hand, instead of the undivided monopoly of Great
Britain, we see a few imperialist powers contending for the
right to share in this monopoly, and this struggle is characteristic of the whole period of the early twentieth
century. Opportunism cannot now be completely triumphant in the
working-class movement of one country for decades as it was in
Britain in the second half of the nineteenth century; but in a
number of countries it has grown ripe, overripe, and rotten, and
has become completely merged with bourgeois policy in the form
of
“social-chauvinism”. [14]

---
Notes:
[1]

Hobson, op. cit., pp. 59, 62.
— Lenin

[2]

Schulze-Gaevernitz, Britischer Imperialismus , S. 320 et
seq.
— Lenin

[3]

Sartorius von Waltershausen, Das volkswirtschaftliche System , etc., Berlin, 1907, Buch IV.
— Lenin

[4]

Schilder, op. cit., S. 393.
— Lenin

[5]

Schulze-Gaevernitz, op. cit., S. 122.
— Lenin

[6]

Die Bank , 1911, 1, S. 10-11.
— Lenin

[7]

Hobson, op. cit., pp. 103, 205, 144, 335, 386.
— Lenin

[8]

Gerhard
Hildebrand, Die Erschütterung der Industrieherrschaft und des Industriesozialismus , 1910, S. 229 et seq.
— Lenin

[9]

Schulze-Gaevernitz, Britischer Imperialismus S. 301.
— Lenin

[10]

Statistik des Deutschen Reichs , Bd. 211.
— Lenin

[11]

Henger, Die Kapitalsanlage der Franzosen , Stuttgart, 1913.
— Lenin

[12]

Hourwich, Immigralion and Labour, New York, 1913.
— Lenin

[13]

Briefwechsel von Marx und Engels , Bd. II, S. 290; 1V, 433—Karl Kautsky, Sozialismus und Kolonialpolitik , Berlin, 1907, S. 79; this pamphlet was
written by Kautsky in those infinitely distant days when he was
still a Marxist.
— Lenin

[14]

Russian social-chauvinism in its overt form, represented by the
Potresovs, Chkenkelis, Maslovs, etc., and its covert form
(Chkeidze, Skobelev, Axelrod, Martov, etc.) also emerged from
the Russian variety of opportunism, namely, liquidationism.
— Lenin

[15]