Monopoly as the logical outcome of capitalism
The concentration of capital and of production in the hands of
fewer and fewer firms follows inevitably from the social conditions of
capitalist production, among which the most general are (a) the social division
of labour from which springs the differentiation of the various branches of
production, and (b) private ownership of the means of production. Given these
things and competition exists in its germinal form. Given the further
development of (a) commodity production and (b) the appearance on the market of
labour-power as a commodity,
and the conditions exist for the development of competition into its capitalist
form. Capitalist production bursts the bounds which constrained competition and
made it an essential and a universal condition of production. Competition
imposed upon each capitalist owner of means of production the need to cheapen
the production of commodities. In other words, it made it imperative for each
capitalist firm to produce on a higher
scale, i.e., with larger masses of better organised and more thoroughly
exploited workers equipped with more mechanised instruments of production. In
short, capitalism both extended and intensified competition, and with it the
elimination of the less well-equipped producers. The logical end of this elimination
could be none other than one solitary ultimate victor.
Concretely, however, certain difficulties must be overcome before
this end can be attained. The field of direct competition is divided into
different branches of production and a number of different centres (local and
national markets which only in their aggregation constitute a world market).
Thus before a lone survivor could be reached on a world scale, lone survivors
must first have been evolved in each of these branches of production and in each
of these centres.
But the evolution of an absolute monopoly in any one branch of
production (steel production, say) on a world scale cuts across and conflicts
with the evolution of a monopolist control of any local or national market, or
economy. Thus the tendency towards monopoly, the more sure and certain it
becomes, cannot realise itself in a smooth, linear fashion but must proceed dialectically, i.e., by the creation
and progressive surmounting of a whole series of violent antagonisms. Moreover,
since the rate of development, owing to physical, historical and political
conditions, as well as economic ones, cannot help but vary from time to time,
from industry to industry, and from country to country, the force and
complexity of these antagonisms and their 12 Imperialism, the Highest Stage of Capitalism
dialectical
consequences cannot help but be multiplied beyond all reckoning. Hence,
although the tendency towards monopoly must be recognised as an absolute law of
capitalist production, it by no means gives grounds for the utopian
reformist-socialist dream of a peaceful transition, through a regular process
of “inevitable gradualness”, from capitalist competition to a world monopoly
(or a number of national monopolies) which could be peacefully “taken over” by
the state “on behalf of the people”.
If the process is viewed not in its abstract unity, but in its concrete and
multiform totality, it will be
seen that the tendency toward monopoly is one that can only realise itself approximately, and never absolutely, since in its concrete
forms each detail tendency engenders a resistance to itself which can only be
transcended by engendering resistance on a higher plane, and so on,
progressively, until a crisis either of war or of social revolution (or of both)
is precipitated.
In other words, while the tendency towards monopoly does in fact
involve the negation of competition within a number of spheres of production
and exchange of commodities, it produces at the same time over the whole field
of capitalist economy, and still more over the whole field of bourgeois
society, an intensification of competitive antagonisms, so that the
(approximate) attainment of monopoly, instead of eliminating competition (and
antagonism) from society, on the contrary, raises them progressively to a higher and more destructive scale.
This is seen most clearly when it is borne in mind that competition is of many
kinds. There is, for example, the general competition between those who buy and
those who sell, as well as the competition of the sellers and buyers among
themselves. The elimination of competition among the sellers, instead of
eliminating competition among the buyers, only intensifies these latter forms
of competition.
The tendency towards monopoly is concretised into a system with
the emergence of a new category of capital, that of finance capital. This again gives an example of the
transformation of quantity into quality. As a capitalist industrial enterprise
(in steel production, for example) rises to a position of monopolistic
dominance in its specific industry it finds itself, as trade fluctuates, at one
time possessed of more money capital (realised profits) than it needs for the
expansion of its business and, at another, faced with emergency needs for fresh
money-capital. In the one phase it invests its surplus in bank capital; in the
other it gives a share in its capital to the bank in exchange for a loan. A
parallel process goes on with the banks, and the two complementary processes
end with the merging of the capital of a monopolistic industrial firm and a
monopolistic banking company to form a new type of monopolistic enterprise
which transcends the limitations of industry and banking each in themselves,
and carries the Imperialism, the Highest Stage of Capitalism
process of domination to a higher and a more
comprehensive scale. With the formation of finance capital begins the process
of bringing the economy of the country of its origin under the domination of a
small group of financial oligarchs.
This process has another and even more far-reaching aspect.
Insofar as monopoly is attained it makes possible (if only temporarily) the
stabilisation of prices and the limitation of production to the estimated needs
of the monopoly-controlled market. By doing this, relative excess of production
is eliminated along with redundant managerial and sales staffs. As a result,
the monopoly obtains an increased volume of profit in circumstances which
preclude further investment of capital within its own sphere. Hence the export
of capital takes on an ever-growing importance. The world becomes partitioned
more and more, and in two distinct ways. Economically, the export of capital
facilitates the development both of horizontal and of vertical monopolies,
i.e., the bringing of a given industry under the control of an international monopoly, and the
establishment of monopoly control of a series
of industries which work up raw material from its point of natural
origin to its final complete form. These processes intersect, collide, and also
combine to give rise to higher forms of monopoly. Ultimately, both of them
converge on the two extreme points of (a) control of the sources of origin of
indispensable materials and (b) control of markets in which to dispose of
finished products. Both thus add impetus to the partitioning of much of the
Earth’s territory into “spheres of influence” among the rival imperialist
powers. And since this process of imperialist partitioning had been completed
(approximately) by the end of the 19th century — and the economic forces
impelling imperialist expansion still continued — it followed of necessity that
there had to become manifest yet another transformation of “quantity into
quality”: the process of imperialist expansion brought the imperialist powers (the
politico-military representatives of rival financial oligarchies) to the point
at which further expansion could only be attained at each other’s expense.
The history of monopoly capitalism is at the same time the history
of the strengthening of the state power within each of the “advanced”
capitalist countries and its use to further the interests of the finance
capitalists of its own country on the world market. At the beginning of this
process the spokespeople of the most advanced and most expansionist capitalist
powers were often quite forthright about the use of state power to defend and
promote these interests. Thus, in 1907, Woodrow Wilson, who was to become US
president in 1912, declared: “Concessions obtained by financiers must be
safeguarded by ministers of state, even if the sovereignty of unwilling nations
be outraged in the process.”5 Wilson’s
secretary of state William Jennings Bryan was equally candid, telling a
gathering of US financiers: “I can say, 14 Imperialism, the Highest Stage of Capitalism
not merely in
courtesy — but as a fact — my department is your department; the ambassadors,
the ministers, and the consuls are all yours. It is their business to look
after your interests and to guard your rights.”6
By the beginning of the 20th century the penetrating power of
finance capital had brought about a complete transformation of the relations
between the “sovereign states” which made up what bourgeois journalists and
bourgeois politicians loved to call the “community of nations”. Whereas in
diplomatic theory all sovereign states meet and do business as equals (i.e.,
equally “sovereign” within their territory). finance capital brings into being
a differentiation of states into debtors and creditors. This inter-linking of
states, the subordination of the great majority of states to the financial
overlordship of a few financially rich powers, supplements the open territorial
partition of the world. Its result was that by 1914 virtually every state in
the world outside the few “Great Powers” (Britain, France, Germany, Japan, the
USA and Russia) was a financial vassal of one or another of these “empires”.
And, since each of these “empires” was impelled by the need to “expand” still
further, it could only expand at the expense of one or more of the others. Thus
the cause of imperialism (and imperialist war) was shown to be the development
of capitalism into a new and higher stage in which its antagonisms had reached
a point that further development could only be expressed through veiled or open
inter-imperialist war on the one hand, and in potential or actual revolutionary
uprisings on the other.
Summing up this whole process, Lenin wrote in December 1915:
It is highly important to have in mind
that this change was caused by nothing but the direct development, growth,
continuation of the deep-seated and fundamental tendencies of capitalism and
production of commodities in general. The growth of commodity exchange, the
growth of large-scale production are fundamental tendencies observable for
centuries throughout the whole world. At a certain stage in the development of
exchange, at a certain stage in the growth of large-scale production, namely,
at the stage that was reached approximately at the end of the nineteenth and
the beginning of the twentieth centuries, commodity exchange had created such
an internationalisation of economic relations, and such an internationalisation
of capital, accompanied by such a vast increase in large-scale production, that
free competition began to be replaced by monopoly. The prevailing types were no
longer enterprises freely competing inside the country and through intercourse
between countries, but monopoly alliances of entrepreneurs, trusts. The typical
ruler of the world became finance capital, a power that is peculiarly mobile
and flexible, peculiarly intertwined at home and internationally, peculiarly
devoid of individuality and divorced from the immediate processes of Imperialism.
production, peculiarly easy to concentrate, a power that has
already made peculiarly large strides on the road to concentration, so that
literally several hundred billionaires and millionaires hold in their hands the
fate of the whole world.
Social Plugin