Lenin's State Monopoly Capitalism

_{Meyerhold's production of The Bathhouse by Mayakovsky, March 16 1930}

"The methods of Taylorism may be applied to the work of the actor in the same way as they are to any other form of work with the aim of maximum productivity."

_{Vsevolod Emilevich Meyerhold, 1922}

In my post on Battleship Potemkin I posted about the Kronstadt sailors revolt of 1921. At the 10th Party Congress of the Bolshevik Party Lenin declared; "Enough Opposition", and the Red Army crossed the ice and attacked the revolting sailors.

At the Tenth Congress, as the Kronstadt soviet was being crushed by arms and buried under a barrage of slander, Lenin attacked the radical-left bureaucrats who had formed a “Workers’ Opposition” faction with the following ultimatum, the logic of which Stalin would later extend to an absolute division of the world: “You can stand here with us, or against us out there with a gun in your hand, but not within some opposition. . . . We’ve had enough opposition.”

Ironically their demands were then used by Lenin to create his New Economic Program.

"Our poverty and ruin are so great that we cannot at a single stroke create full socialist production" Lenin

Lenin came before the Congress in March 1921 and proposed the NEP. The NEP was in essence a capitalist free market. The NEP stated that requisitioning of food and agricultural surpluses, a doctrine of War Communism, must be ended. Instead, the government would tax the peasants on a fixed percentage of their production. Trotsky had already proposed a similar policy, but it was rejected by his fellow colleagues, including Lenin. Basically, this promoted a free agricultural market in Russia.

Lenin's N.E.P.

The Bolshevik revolutionary takeover in October 1917 was followed by over two years of civil war in Russia between the new Communist regime (with its Red Army) and its enemies--the conservative military officers commanding the so-called White armies. The struggle saw much brutality and excesses on both sides with the peasants suffering most from extortionate demands of food supplies and recruits by both sides. The repressive and dictatorial methods of the Bolshevik government had so alienated the mass of peasants and industrial working class elements that the erstwhile most loyal supporters of the regime, the sailors at the Kronstadt naval base, rebelled in March 1921 (see ob19.doc) to the great embarrassment of senior Bolsheviks. Though the rebellion was mercilessly crushed, the regime was forced to moderate its ruthless impulses. The New Economic Policy (NEP) was the result, a small concession to the capitalist and free market instincts of peasant and petty bourgeois alike. Moreover, victory in the civil war was assured by this stage, thus allowing a relaxation of the coercive methods symbolized by the War Communism of the previous two to three years.

The New Economic Policy (NEP), introduced by Lenin at the Tenth Party Congress in March 1921, represented a major departure from the party's previous approach to running the country. During the civil war, the Soviet state had assumed responsibility for acquiring and redistributing grain and other foodstuffs from the countryside, administering both small- and large-scale industry, and a myriad of other economic activities. Subsequently dubbed (by Lenin) "War Communism," this approach actually was extended in the course of 1920, even after the defeat of the last of the Whites. Many have claimed that War Communism reflected a "great leap forward" mentality among the Bolsheviks, but desperation to overcome shortages of all kinds, and particularly food, seems a more likely motive. In any case, in the context of continuing urban depopulation, strikes by disgruntled workers, peasant unrest, and open rebellion among the soldiers and sailors stationed on Kronstadt Island, Lenin resolved to reverse direction.

Lenin's economic model was like Trotsky's transitional program. It was the creation of state capitalism to create the conditions for monopoly capitalism to occur in Russia. His socialism as he liked to call it was state capitalism with electrification, and just a dash of Taylorism.

“Communism is the Power of Soviets plus the electrification of the whole country!”

In fact Lenin was a Taylorist and recognized that modern capitalism required fordist production which is what is currently occurring in China. It's failure in the Soviet Union of the seventies and eighties, was due to its use for military production rather than for consumer goods. In other words Reagan did bankrupt the Soviet Union by creating a competition between the U.S. Military Industrial Complex and its Soviet counterpart. The result was not just the collapse of the Soviet Union, but its collapse into a basket case economy. It did not have the production models required for consumer goods required for a market economy.

In terms of its impact on world politics, Lenin's State and Revolution was probably his most important work. This was derived from the theoretical analysis contained in his earlier work, Imperialism, the Highest Stage of Capitalism (1916). Lenin's theory of imperialism demonstrated to his satisfaction that the whole administrative structure of “socialism” had been developed during the epoch of finance or monopoly capitalism. Under the impact of the First World War, so the argument ran, capitalism had been transformed into state-monopoly capitalism. On that basis, Lenin claimed, the democratisation of state-monopoly capitalism was socialism. As Lenin pointed out in The Impending Catastrophe and How to Combat It (1917):

“For socialism is merely the next step forward from state-capitalist monopoly. Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly” (original emphasis, www.marxists.org/archive/lenin/works/1917/ichtci/11.htm).

Lenin’s perspective may be briefly expressed in the following words: The belated Russian bourgeoisie is incapable of leading its own revolution to the end! The complete victory of the revolution through the medium of the “democratic dictatorship of the proletariat and the peasantry” will purge the country of medievalism, invest the development of Russian capitalism with American tempos, strengthen the proletariat in the city and country, and open up broad possibilities for the struggle for socialism. On the other hand, the victory of the Russian revolution will provide a mighty impulse for the socialist revolution in the West, and the latter will not only shield Russia from the dangers of [feudal-monarchical] restoration but also permit the Russian proletariat to reach the conquest of power in a comparatively short historical interval.

Lenin unambiguously endorsed the view that the proletariat should use markets to prepare underdeveloped countries for socialism. It is common knowledge that his New Economic Policy used market mechanisms to stimulate economic recovery after the devastation of the Russian Civil War, but some do not realize that Lenin saw markets as more than just an expedient. He actually viewed market mechanisms as necessary for moving underdeveloped countries toward socialism. Lenin recognized that the economies of underdeveloped, agrarian countries in transition to socialism combine subsistence farming, small commodity production, private capitalism, state capitalism, and socialism, with small commodity production in the dominant role (1965, 330–31). These societies contain many more peasants than proletarians, and because peasants favor the petty-bourgeois mode of production, they tend to side with the bourgeoisie against the proletariat. It is tempting to argue that this situation calls for an immediate transition to socialism, in order to force the peasantry to cooperate with the proletariat in defeating the bourgeoisie. But Lenin did not believe this. He argued that the attempt to push agrarian countries directly into socialism, that is, to eliminate markets before the build up of the productive forces had converted peasant agriculture and small commodity production into modern, large-scale industries, was a mistake that would actually hamper economic development and thwart socialist construction. The solution he proposed was for the proletarian state to use capitalism, i.e., commodity production, free markets, and concessions with foreign capitalists, to promote the growth of the productive forces, and to eliminate the conflict of interest between peasants and industrial workers by converting agriculture into a large-scale industry and the peasants into proletarians (1965, 330–33, 341–47).

LENIN'S SOCIALISM

The starting point must be Lenin's conception of 'socialism': When a big enterprise assumes gigantic proportions, and, on the basis of an exact computation of mass data, organises according to plan the supply of raw materials to the extent of two-thirds, or three fourths, of all that is necessary for tens of millions of people; when raw materials are transported in a systematic and organised manner to the most suitable places of production, sometimes situated hundreds of thousands of miles from each other; when a single centre directs all the consecutive stages of processing the materials right up to the manufacture of numerous varieties of finished articles; when the products are distributed according to a single plan among tens of millions of customers.

....then it becomes evident that we have socialisation of production, and not mere 'interlocking'; that private economic and private property relations constitute a shell which no longer fits its contents, a shell which must inevitably decay if its removal is artificially delayed, a shell which may remain in a state of decay for a fairly long period ...but which will inevitably be removed Lenin, Collected Works, Vol.22, page 303.

SOCIALISM?

This is an important passage of Lenin's. What he is describing here is the economic set-up which he thought typical of both advanced monopoly capitalism and socialism. Socialism was, for Lenin, planned capitalism with the private ownership removed.

Capitalism has created an accounting apparatus in the shape of the banks, syndicates, postal service, consumers' societies, and office employees unions. Without the big banks socialism would be impossible.

The big banks are the state apparatus which we need to bring about socialism, and which we take ready made from capitalism; our task is merely to lop off what characteristically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. Quantity will be transformed into quality.

A single state bank, the biggest of the big, with branches in every rural district, in every factory, will constitute as much as nine-tenths of the socialist apparatus. This will be country-wide book-keeping, country-wide accounting of the production and distribution of goods, this will be, so to speak, something in the nature of the skeleton of socialist society. Lenin, Ibid, Vol.26 page 106.

HEY PRESTO!

This passage contains some amazing statements. The banks have become nine-tenths of the socialist apparatus. All we need to do is unify them, make this single bank bigger, and Hey Presto, you now have your basic socialist apparatus.

Quantity is to be transformed into quality. In other words, as the bank gets bigger and more powerful it changes from an instrument of oppression into one of liberation. We are further told that the bank will be made even more democratic. Not made democratic as we might expect but made more so. This means that the banks, as they exist under capitalism, are in some way democratic. No doubt this is something that workers in Bank of Ireland and AIB have been unaware of.

For Lenin it was not only the banks which could be transformed into a means for salvation. Socialism is merely the next step forward from state capitalist monopoly. Or, in other words, socialism is merely state capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly Lenin, Ibid, Vol. 25 page 358.

State capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no immediate rungs. Lenin, Ibid, Vol. 24 page 259.

BUILDING CAPITALISM

This too is important. History is compared to a ladder that has to be climbed. Each step is a preparation for the next one. After state capitalism there was only one way forward - socialism. But it was equally true that until capitalism had created the necessary framework, socialism was impossible. Lenin and the Bolshevik leadership saw their task as the building of a state capitalist apparatus.

...state capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic. If in approximately six months time state capitalism became established in our Republic, this would be a great success and a sure guarantee that within a year socialism will have gained a permanently firm hold and will become invincible in our country Lenin, Ibid, Vol. 27 page 294.

While the revolution in Germany is still slow in coming forth, our task is to study the state capitalism of the Germans, to spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of it Lenin, Ibid, Vol. 27 page 340.

Socialism or State Capitalism?

So what did the Bolsheviks aim to create in Russia? Lenin was clear, state capitalism. He argued this before and after the Bolsheviks seized power. For example, in 1917, he argued that "given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!" He stressed that "socialism is merely the next step forward from state-capitalist monopoly . . . socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly."³

The Bolshevik road to "socialism" ran through the terrain of state capitalism and, in fact, simply built upon its institutionalised means of allocating recourses and structuring industry. As Lenin put it, "the modern state possesses an apparatus which has extremely close connections with the banks and syndicates, an apparatus which performs an enormous amount of accounting and registration work . . . This apparatus must not, and should not, be smashed. It must be wrestled from the control of the capitalists," it "must be subordinated to the proletarian Soviets" and "it must be expanded, made more comprehensive, and nation-wide." This meant that the Bolsheviks would "not invent the organisational form of work, but take it ready-made from capitalism" and "borrow the best models furnished by the advanced countries."⁴

Once in power, Lenin implemented this vision of socialism being built upon the institutions created by monopoly capitalism. This was not gone accidentally or because no alternative existed. As one historian notes: "On three occasions in the first months of Soviet power, the [factory] committees leaders sought to bring their model [of workers' self-management of the economy] into being. At each point the party leadership overruled them. The Bolshevik alternative was to vest both managerial and control powers in organs of the state which were subordinate to the central authorities, and formed by them."⁵

Rather than base socialist reconstruction on working class self-organisation from below, the Bolsheviks started "to build, from the top, its 'unified administration'" based on central bodies created by the Tsarist government in 1915 and 1916.⁶ The institutional framework of capitalism would be utilised as the principal (almost exclusive) instruments of "socialist" transformation. "Without big banks Socialism would be impossible," argued Lenin, as they "are the 'state apparatus' which we need to bring about socialism, and which we take ready made from capitalism; our task here is merely to lop off what capitalistically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. A single State Bank, the biggest of the big . . .will constitute as much as nine-tenths of the socialist apparatus. This will be country-wide book-keeping, country-wide accounting of the production and distribution of goods." While this is "not fully a state apparatus under capitalism," it "will be so with us, under socialism." For Lenin, building socialism was easy. This "nine-tenths of the socialist apparatus" would be created "at one stroke, by a single decree." ⁷

Lenin' State Monopoly Capitalism is the model being used by the former state capitalist regimes in Asia like China and Viet Nam. They are full filing Lenin's dictum. And ironically in China's case they have become a new Imperialist power.

Lenin: 1917/ichtci: Can We Go Forward If We Fear To Advance ...

Everybody talks about imperialism. But imperialism is merely monopoly capitalism.

That capitalism in Russia has also become monopoly capitalism is sufficiently attested by the examples of the Produgol, the Prodamet, the Sugar Syndicate, etc. This Sugar Syndicate is an object-lesson in the way monopoly capitalism develops into state-monopoly capitalism.

And what is the state? It is an organisation of the ruling class — in Germany, for instance, of the Junkers and capitalists. And therefore what the German Plekhanovs (Scheidemann, Lensch, and others) call "war-time socialism" is in fact war-time state-monopoly capitalism, or, to put it more simply and clearly, war-time penal servitude for the workers and war-time protection for capitalist profits.

Now try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state- monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!

For if a huge capitalist undertaking becomes a monopoly, it means that it serves the whole nation. If it has become a state monopoly, it means that the state (i.e., the armed organisation of the population, the workers and peasants above all, provided there is revolutionary democracy) directs the whole undertaking. In whose interest?

Either in the interest of the landowners and capitalists, in which case we have not a revolutionary-democratic, but a reactionary-bureaucratic state, an imperialist republic.

Or in the interest of revolutionary democracy—and then it is a step towards socialism.

For socialism is merely the next step forward from state-capitalist monopoly. Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly.

To apply the Lenin's theory on state capitalism in the renovation cause of Vietnam 10:18 28-07-2005

Role of the State in applying the theories of State capitalism in Vietnam 16:05 09-05-2005

From a review of Lenin's ideas and concepts of State capitalism and State capitalist economy as seen from Vietnamese perspective, the paper reaffirms an indispensable role of the State in the present development of market economy.

The new Economic Policy of V.I. Lenin with the use of state capitalism in our country nowadays 10:21 28-07-2005

The awareness of the socialist-oriented market economy in Vietnam 12:43 04-07-2006

Realizing the market economy under socialist regulation in Vietnam is a major content in the economic model in the transitional period toward socialism. The article analyzes and elaborates the theorical and practical sides of the socialist regulated market economy, through which to make the following conclusions. 1. In the context of globalization and international economic integration today. The model of the socialist regulated market economy which has been pursued since the IX National Party Congress is a correct policy both theoretically and practically. 2. However if we regarded the model of the socialist regulated market economy as Vietnam's creative policy, it would lead us to fall into subjective thinking. 3. Through theory and practice the author of this article concludes that. a. According to Marxist doctrine the view that socialism emerged after capitalism still remains scientific b. Human elements in socialism contradicts with those in the previous societies; as a result if the criteria that were applied to solve social problems of socialist society to be imposed on the period of market economy being in existence, it would naturally stand in the way of the development of market economy. c. The key for Vietnam at present is how to solve the relations between growth and development, in other words economic growth should go along with social development d. Vietnam's economy should be broken just into two sectors, namely, state run and private run. It should not be divided into 6 sectors as presently applied. e. The role of the private owned sector i!1 the national economy should be appreciated.

Even the right wing occasionally gets it right but for the wrong reasons. In this case another red scare, red baiting, reds under the bed, commies out to get us, article reveals;

In his "Report to the Fourth Congress of the Communist International," Lenin explained the basis for NEP. He said that Russia needed capitalism before it could have socialism. The form of capitalism Lenin advocated was called "state capitalism." As early as 1918 Lenin had stated, "State capitalism would be a step forward as compared with the present state of affairs."

By 1922, when Lenin delivered his report, state capitalism was still the order of the day. "This sounds very strange," admitted Lenin, "and perhaps even absurd." Russia was unready for socialism and lacked the strength to create communism. In his report Lenin said that socialism in Russia had been adopted "perhaps too hastily."

Does this mean Lenin, like the Chinese and Russian leaders after him, had abandoned the ultimate communist goal?

"I repeat," said Lenin in his 1922 report, "it seems very strange to everyone that a nonsocialist element should be ... regarded superior to socialism in a republic which declares itself as socialist republic. But the fact will become clear if you recall that ... the economic system of Russia [is backward]."

This exact formulation could be applied to communist China. In fact, this is the line that the Chinese Communist Party has adopted for itself. And what Mr. Lee Kuan Yew of Singapore has mistaken for China's commercial objectives, are actually communist objectives. Talk of a future war with America is not simply a question of Taiwan. China's leaders look ahead to a day when a socialist civilization will be possible -- thanks to what Lenin called "state capitalism."

The purpose of state capitalism, as it exists in today's China and Lenin's Russia, is to pave the way for socialism. "The state capitalism that we have introduced in our country is of a special kind," noted Lenin. "It does not correspond to the usual conception of state capitalism. We hold all the key positions."

Lenin emphasized that all land in Russia belonged to the state. "This is very important," said Lenin, "although our opponents think it of no importance at all."

This is a revealing statement. Politicians like Lee Kuan Yew seem to be clueless. China is a communist country that practices state capitalism. China is following the Leninist path. "We have already succeeded in making the peasantry content and in reviving both industry and trade," boasted Lenin. Furthermore, the communist form of state capitalism not only owns the land which the peasants use, but "our proletarian state owns ... all the vital branches of industry."

The market economists of all political stripes fail to understand that State Monpoly Capitalism results from the fact that all capital must create monopoly. There is no free market, there is a market and it is dominated by monopolies, or oligopolies. These can be owned privately or by the state it matters little since both are forms of capitalism. The neo-con political scientists, divorcing themselves as they do from economics, decry capitalist models that are not based upon their American model.

In this they fail to understand the historical development political economy of the 20th Century which was Fordism and Capitalist Monopoly. The later requires state intervention as the American Military Industrial Complex and the development of capitalism in South Korea shows. Something that Lenin reading Marx understood.

In practical life we find not only competition, monopoly and the antagonism between them, but also the synthesis of the two, which is not a formula, but a movement. Monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists. If the monopolists restrict their mutual competition by means of partial associations, competition increases among the workers; and the more the mass of the proletarians grows as against the monopolists of one nation, the more desperate competition becomes between the monopolists of different nations. The synthesis is of such a character that monopoly can only maintain itself by continually entering into the struggle of competition.
Karl Marx
The Poverty of Philosophy
Chapter Two: The Metaphysics of Political Economy

See:

40 Years Later; The Society of the Spectacle

China: The Truimph of State Capitalism

State Capitalism By Any Other Name

Find blog posts, photos, events and more off-site about:
Lenin, Bolsheviks,
Marx,
Kronstadt,
USSR,
China,
Viet Nam,
taylorism,fordism, NEP, state capitalism, state monopoly capitalism, monopoly capitalism,

Ernest Mandel

Workers Under Neo-capitalism

(NEO LIBERALISM BY ANY OTHER NAME)

---

A paper originally delivered at the Socialist Scholars Conference 1968.
Published in International Socialist Review, November-December 1968.

Downloaded with thanks from the Mandel Archive at www.angelfire.com/pr/red/mandel/

Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

When we look at the history of the modern proletariat, whose direct ancestors were the unattached and uprooted wage earners in the medieval towns and the vagabonds of the 16th century – so strikingly described by that great novel from my country Till Eulenspiegel – we notice the same combination of structural stability and conjunctural change. The proletarian condition is, in a nutshell, the lack of access to means of production or means of subsistence which, in a society of generalised commodity production, forces the proletarian to sell his labor-power. In exchange for this labor-power he receives a wage which then enables him to acquire the means of consumption necessary for satisfying his own needs and those of his family.

This is the structural definition of the wage earner, the proletarian. From it necessarily flows a certain relationship to his work, to the products of his work, and to his overall situation in society, which can be summarised by the catchword “alienation.” But there does not follow from this structural definition any necessary conclusions as to the level of his consumption, the price he receives for his labor-power, the extent of his needs or the degree to which he can satisfy them. The only basic interrelationship between structural stability of status and conjunctural fluctuations of income and consumption is a very simple one: Does the wage, whether high or low, whether in miserable Calcutta slums or in the much publicised comfortable suburbs of the American megalopolis, enable the proletarian to free himself from the social and economic obligation to sell his labor-power? Does it enable him to go into business on his own account?

Occupational statistics testify that this is no more open to him today than a hundred years ago. Nay, they confirm that the part of the active population in today’s United States which is forced to sell its labor-power is much higher than it was in Britain when Karl Marx wrote Das Kapital, not to speak of the United States on the eve of the American Civil War.

Nobody will deny that the picture of the working class under neo-capitalism would be highly oversimplified if it were limited to featuring only this basic structural stability of the proletarian condition. In general, though, Marxists who continue to stress the basic revolutionary role of today’s proletariat in Western imperialist society avoid that pitfall. It is rather their critics who are in error, who commit the opposite error in fact of concentrating exclusively on conjunctural changes in the situation of the working class, thereby forgetting those fundamental structural elements which have not changed.

I do not care very much for the term “neo-capitalism” which is ambiguous, to say the least. When one speaks about the “neo-reformism” of the Communist parties in the West, one means, of course, that they are basically reformist; but when the term “neo-socialists” was used in the thirties and early forties to define such dubious figures as Marcel Deat or Henri de Man, one meant rather that they had stopped being socialists. Some European politicians and sociologists speak about “neo-capitalism” in the sense that society has shed some of the basic characteristics of capitalism. I deny this most categorically, and therefore attach to the term “neo-capitalism” the opposite connotation: a society which has all the basic elements of classical capitalism.

Nevertheless I am quite convinced that starting either with the great depression of 1929-32 or with the second world war, capitalism entered into a third stage in its development, which is as different from monopoly capitalism or imperialism described by Lenin, Hilferding and others as monopoly capitalism was different from classical 19th century laissez-faire capitalism. We have to give this child a name; all other names proposed seem even less acceptable than “neo-capitalism.” “State monopoly capitalism,” the term used in the Soviet Union and the “official” Communist parties, is very misleading because it implies a degree of independence of the state which, to my mind, does not at all correspond to present-day reality. On the contrary, I would say that today the state is a much more direct instrument for guaranteeing monopoly surplus profits to the strongest private monopolies than it ever was in the past. The German term Spätkapitalismus seems interesting, but simply indicates a time sequence and is difficult to translate into several languages. So until somebody comes up with a better name – and this is a challenge to you, friends! – we will stick for the time being to “neo-capitalism.”

We shall define neo-capitalism as this latest stage in the development of monopoly capitalism in which a combination of factors – accelerated technological innovation, permanent war economy, expanding colonial revolution – have transferred the main source of monopoly surplus profits from the colonial countries to the imperialist countries themselves and made the giant corporations both more independent and more vulnerable.

More independent, because the enormous accumulation of monopoly surplus profits enables these corporations, through the mechanisms of price investment and self-financing, and with the help of a constant build-up of sales costs, distribution costs and research and development expenses, to free themselves from that strict control by banks and finance capital which characterised the trusts and monopolies of Hilferding’s and Lenin’s epoch. More vulnerable, because of shortening of the life cycle of fixed capital, the growing phenomenon of surplus capacity, the relative decline of customers in non-capitalist milieus and, last but not least, the growing challenge of the non-capitalist forces in the world (the so-called socialist countries, the colonial revolution and, potentially at least, the working class in the metropolis) has implanted even in minor fluctuations and crises the seeds of dangerous explosions and total collapse.

For these reasons, neo-capitalism is compelled to embark upon all those well-known techniques of economic programming, of deficit financing and pump-priming, of incomes policies and wage freezing, of state subsidising of big business and state guaranteeing of monopoly surplus profit, which have become permanent features of most Western economies over the last 20 years. What has emerged is a society which appears both as more prosperous and more explosive than the situation of imperialist countries 30 years ago.

It is a society in which the basic contradictions of capitalism have not been overcome, in which some of them reach unheard-of dimensions, in which powerful long-term forces are at work to blow up the system. I will mention here in passing only some of these forces: The growing crisis of the international monetary system; the trend towards a generalised economic recession in the whole capitalist world; the trend to restrict or suppress the basic democratic freedoms of the working class, in the first place, free play of wage bargaining; the trend toward deep and growing dissatisfaction of producers and consumers with a system which forces them to lose more and more time producing and consuming more and more commodities which give less and less satisfaction and stifle more and more basic human needs, emotions and aspirations; the contradictions between the accumulation of wasteful “wealth” in the West and the hunger and misery of the colonial peoples; the contradictions between the immense creative and productive potentialities of science and automation and the destructive horror of nuclear war in the shadow of which we are forced to live permanently – these epitomise the basic contradictions of today’s capitalism.

READ ON HERE

United Technologies to combine its aerospace business with U.S. contractor Raytheon to create $120 billion aerospace and defense giant https://reut.rs/2R22PAP

M&A MERGERS AND ACQUISITIONS ARE 

The tendency of early capitalism to develop into its monopolistic form is inherent in the system; a market economy based on private ownership and competition for profit.Dec 14, 2009

Monopoly Capitalism - In Defence of Marxism

https://www.marxist.com/monopoly-capitalism.htm

Theories of competition and monopoly - CiteSeerX

citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.628.2095&rep=rep1...

by W Semmler - ‎Cited by 42 - ‎Related articles

stage of free competition and the stage of monopoly capitalism . They maintain that competitive capitalism revealed an inherent tendency towards the formation of monopolies at the end of the 19th ... classical and classical theories of competition with Marx's own ..... Marxian literature by concluding that concentration leads to.

b. monopoly capitalism-imperialism - Marxists Internet Archive

https://www.marxists.org/subject/economy/authors/pe/pe-ch18.htm

Monopoly capitalism, or imperialism, is the highest and last stage of ... a Marxist analysis of imperialism as the highest stage of capitalism, and at the same time as ... The bringing about of monopoly by concentration of production is a regular ..... This tendency clashes, however, with the operation of the basic economic law of ...

What Is Monopoly Capital? - Monthly Review

https://monthlyreview.org › 2018

Jan 1, 2018 - Monopoly capital” is a term for the new form of capital, embodied in the ... the size of individual capitals (concentration, or accumulation proper) and the fusion .... In this view, Marx's law of the tendency of the rate of profit to fall, ...

Ernest Mandel: Intro Marxist Economic (Chap.2)

https://www.marxists.org/archive/mandel/1967/intromet/ch02.htm

Jul 21, 2004 - Ernest Mandel: An Introduction to Marxist Economic Theory (2. ... is this concentrationof the means of production in monopoly form and in the .... of labor-power has a tendency to fall by virtue of the fact that capitalist industry ...

REUTERS.COM

United Technologies, Raytheon to create $120 billion aerospace and...
United Technologies Corp agreed on Sunday to combine its aerospace business with...

 

From Two Essays on Imperialism, New York 1966 ERNST MANDEL Transcribed by Joseph Auciello.

Introduction Since the spring of 1916 when Lenin wrote his pamphlet Imperialism, that work has been a focal point of discussion by both Marxists and non-Marxist political economists. Many critics have attempted to prove that Lenin’s analysis of contemporary capitalism is essentially incorrect; others that it is partially incorrect, but not outdated. Lenin’s “official” defenders in Moscow have tried to prove that every word written in 1916 is still totally valid today, while Marxists have taken into account the developments and changes of the last 50 years, modifying and adding to Lenin’s theory in the light of these changes. For the students of Lenin’s Imperialism, the two essays contained in this bulletin will serve as an introduction to the contemporary debate, indicating the questions which are being discussed and how they are being answered by both critics and defenders of the Marxist concept of imperialism. The author of the first article, E. Germain, is one of the leading theoreticians of the Fourth International and the author of numerous essays on Marxist economics. The Theory of Imperialism and Its Critics was a lecture originally given more than ten years ago to a group of Marxist students already familiar with Lenin’s Imperialism. After discussing the historical development of the theory, Germain goes on to deal briefly with the most important contemporary critics. Ernest Mandel, editor of the Belgian socialist weekly, La Gauche, and a leader of the Belgian Socialist Workers Confederation, is one of the world’s leading Marxist economists. His two volume Traité d’Economie Marxiste will soon be published in English by Monthly Review Press. The article reprinted here is a review of Michael Barratt Brown’s work After Imperialism, and first appeared in the June 1964 issue of the British periodical New Left Review. Mary-Alice Styron July 1966 To Marxists, “imperialism” is not simply the “trend towards expansion” or the “conquest of foreign lands,” as it is defined by most political scientists and sociologists. The word is used in a much more precise sense to describe the general changes which occurred in the political, economic and social activity of the big bourgeoisie of the advanced capitalist countries, beginning in the last quarter of the 19th century. These changes were closely related to alterations in the basic structure of this bourgeoisie. Marx died too early to be able to analyze these changes. He did not see more than the preliminary signs. Nevertheless, he left some profound remarks in his last writings which later Marxists used as starting points for developing the theory of imperialism. In studying the rapid development of limited liability corporations, Marx underlined, in the Third Volume of Capital (chap.23), that these companies represent a new form of the expropriation of a mass of capitalists by a small handful of capitalists. In this expropriation the legal owner of capital loses his function as entrepreneur and abandons his role in the process of production and his position of command over the productive forces and the labor force. In fact, private property seems to be suppressed, says Marx elsewhere, it is suppressed not in favor of collective ownership but in favor of private ownership by a very small number. Concentration of Capital Marx foresaw the modern structure of capitalism as the final phase of capitalism resulting from the extreme concentration of capital. This was also the starting point taken by most Marxists, especially Hilferding and Lenin. In a paragraph devoted to countertendencies to the trend toward a falling rate of profit (Capital, Volume III, chap.14), Marx also underlined the importance of the export of capital to backward countries. A little further on he generalized this idea by insisting that a capitalist society must continuously extend its base, its area of exploitation. Engels added a more detailed elucidation to Marx’s comments. In his last writings, especially in his famous 1892 introduction to The Condition of the Working Class in England, he underlined other structural phenomena to which the theoreticians of imperialism attached great importance. Engels wrote that from the beginning of the industrial revolution until the 1870’s, England exercised practically an industrial monopoly over the world market. Thanks to that monopoly, in the second half of the 19th century, at the time of the rise of craft unions, English capitalism could grant important concessions to a section of the working class. But, towards the end of the 19th century the German, French, and American competition made inroads into this English monopoly, and inaugurated a period of sharp class struggle in Great Britain. The correctness of Engels’ analysis was borne out as early as the first years of the 20th century. The trade union movement grew not only among the laborers and the masses of the unskilled, but also broke its half-century long alliance with petty-bourgeois radicalism (the Liberal Party) and founded the Labor Party, the mass workers’ party. In two comments on the Third Volume of Capital, edited by Engels in 1894 (comments on the 31st and 32nd chapters), Engels emphasized how difficult it was going to be for capitalism to find a new basis for expansion after the final conquest of the world market. (Elsewhere he says “after the conquest of the Chinese market.”) Competition is limited internally by cartels and trusts, and externally by protectionism. All this he thought represented “the preparations for a general industrial war for the domination of the world market.” Lenin began with these remarks by Engels in developing his theory of the imperialist struggle for the division and re-division of the world market, as well as his theory of the workers’ aristocracy. The Theory of Imperialism by Karl Kautsky and Rosa Luxemburg The most “obvious” phenomenon of the new period in the history of capitalism, which opened with the last quarter of the 19th century, was undoubtedly the series of wars and expeditions, the creation or the expansion of colonial empires: the French expeditions to Tonkin (now Vietnam), Tunisia and Morocco; the conquest of the Congo by Leopold II; the British expansion to the boundaries of India, Egypt and the Sudan, East and South Africa; the German and Italian expansions in Africa, etc. This colonial expansion stimulated the first efforts by Marxists to interpret the development of this period of capitalism. Karl Kautsky emphasized the commercial reasons for imperialist expansion. According to him, industrial capital cannot sell the whole of its production within an industrialized country. In order to realize surplus value, it must provide itself with markets made up of non-industrialized countries, essentially agricultural countries. This was the purpose of the colonial wars of expansion and the reason for the creation of colonial empires. Parvus, in the beginning of the 20th century, while underlining this phenomenon emphasized the role of heavy industry (above all the iron industry) in the transformation which was about to take place in the politics of the international capitalist class. He pointed out how iron played a more and more preponderant role in capitalist industry, and demonstrated that government orders, direct (armaments race) and indirect (competition in naval construction, building of railways and harbor installations in colonial countries, etc.), represented the main outlet for this industry. It was Rosa Luxemburg who drew together in a complete theory all these concepts of an imperialism expanding to compensate for inadequate markets for the products of the biggest capitalist industries. Her theory is mainly one of crises, or to express it more correctly, a theory of the conditions of realization surplus value and of accumulation of capital. It is consistent with the theories of under-consumption worked out over the course of a century by numerous opponents of the capitalist system to show the inevitability of economic crises. According to Rosa Luxemburg, the continual expansion of the capitalist mode of production is impossible within the bounds of a purely capitalist society. The expansion of the production of the means of production within capitalist society is only possible if it goes hand in hand with the expansion of the demand for consumer goods. Without this expansion of the latter demand, the capitalists will not buy any new machines, etc. It is not the expansion of the purchasing power of the working class which allows an adequate expansion of the demand for consumer goods. On the contrary, the more the capitalist system progresses, the more does the purchasing power of the workers represent a relatively smaller proportion of the national income. In order for capitalist expansion to continue it is necessary to have non-capitalist classes which, with an income obtained outside the capitalist system, would be endowed with the additional purchasing power to buy industrial consumer goods. These non-capitalist classes originally are the landowners and farmers. In the countries where the industrial revolution first occurred, the capitalist mode of production developed and triumphed in a non-capitalist milieu, conquering the market which consisted above all of the mass of peasants. Rosa Luxemburg concluded that after the conquest of the national non-capitalist markets, and the not yet industrialized markets the European and North American continents, capital had to throw itself into the conquest of a new non-capitalist sphere, that of the agricultural countries of Asia and Africa. She tied this theory of imperialism to the importance of “compensating outlets” for the capitalist system, outlets presented above all by government purchases of armaments. She foresaw the mechanism which did not reveal its full functioning until the eve of the Second World War. Today, without this “compensating outlet,” which is created by the armaments and war economy, the capitalist system would be in danger of falling periodically into economic crises of the same gravity as that of 1929-33. The Flaws in Luxemburg’s Views It is beyond doubt that historically the development of capitalist industry came about in effect in a non-capitalist milieu and that the existence of the great agricultural markets, national and international, represented the essential safety-valve of the capitalist system during the entire 19th century and the beginning of the 20th. However, from the point of view of economic theory, the Luxemburgian conception of imperialism has certain flaws. It is important to underline them because they obscure certain long run trends in the development of capitalism as a whole. For instance, Luxemburg argued that the capitalist class could not enrich itself by passing its own money from one pocket to another. However, this ignores the fact, illuminated by Marx, that the capitalist class taken as a whole represents a useful abstraction to unveil the laws of motion of capital, but that the phenomenon of periodic crises is understandable only in the framework of the competition of antagonistic capitals and the concentration resulting from that competition. In such a framework it is quite logical that “the capitalist class” enriches itself “by itself,” that is, that certain layers of the capitalist class enrich themselves through the impoverishment of other capitalist layers. This is what has occurred for the last forty years in the United States, at first in relation to the American capitalists, then particularly in relation to the international capitalist classes (first of all the European). This will occur more and more as the purely agricultural markets disappear. Within today’s capitalist world, exports are directed to a large extent to other industrialized countries, and only to a small extent to the markets of “non-capitalist” countries. The fundamental weakness of Rosa Luxemburg’s theory is that it is based simply on the capitalist class’s need for markets to realize surplus value, and ignores the basic changes which have taken place in capitalist property and production. These were the structural problems which Rudolf Hilferding and Lenin tackled. The Theory of Imperialism by Hilferding and Lenin Starting with the remarks made on this subject in the later works of Marx and Engels, Hilferding studied the structural changes of capitalism in the last quarter of the 19th century. He began with capitalist concentration, the concentration of banking and the preponderant part played by the banks in the launching of stock companies and the mergers of enterprises. From this Hilferding defined what he called finance capital, that is, banking capital invested in industry and controlling it either directly (by the purchase of shares, the presence of bank representatives on the boards of directors, etc.), or indirectly (by the establishment of holding companies, concerns and “influence groups”). Hilferding discovered the preponderant role played by banks in the development of heavy industry, especially in Germany, France, the United States, Belgium, Italy and Czarist Russia. He showed that these banks represented the most “aggressive” force in political matters, partly because of the risks involved in investments reaching billions of dollars. In a brilliant conclusion to his work on finance capital, Hilferding predicted the rise of fascism, that is, a merciless and absolute political dictatorship, exercised in favor of big capital, corresponding to the new stage of capitalism as political liberalism corresponded to early competitive capitalism. Confronted with the threat of such a dictatorship, Hilferding concluded, the proletariat must engage in the struggle for its own dictatorship. Lenin drew substantially on Hilferding’s work as well as on the works of some liberal economists like Hobson to produce his work on imperialism at the beginning of the First World War. Like Hilferding, he started from capitalist concentration – the establishment of trusts, cartels, holding companies, etc. – banking concentration, and the appearance of finance capital to characterize what is structurally new in this stage of capitalism. Lenin extended and generalized this structural analysis, naming it monopoly capitalism, in contrast to 19th century competitive capitalism. He analyzed monopoly and monopoly profits, expanding a series of thoughts already begun in Hilferding’s idea that the expansionism of monopoly capitalism takes place primarily through the export of capital. In contrast to competitive capitalism, which concentrated on the export of commodities and which was not interested in its clients, monopoly capitalism, exporter of capital, cannot be without interest in its debtors. It must assure “normal” conditions of solvency, without which its loans would transform themselves into losses: hence the tendency toward some form of political-economic control over the countries in which this capital is invested. Lenin’s analysis of imperialism is completed with a very profound essay on the contradictory, dialectical nature of capitalist monopoly, which suppresses competition at one stage to reproduce it again on a higher level. Applying the law of uneven development both to the relations between the imperialist powers, Lenin showed that the division of the world among the imperialist powers can only be a temporary one, and is inevitably followed by struggles – imperialist war – to obtain a new division as the relationship of forces among these powers changes. Lenin also integrated into his theory of imperialism Engels’ concept of the workers’ aristocracy. The colonial super profits, brought in by the capital exported to backward countries, permit the corruption of part of the working class, above all a reformist bureaucracy which cooperates with the bourgeois democratic regime and obtains great benefits from it. The Theory of Imperialism Adapted to the Present Time Combined with Trotsky’s theory of the permanent revolution – especially his analysis of the combined economic and social development of the colonial and semi-colonial countries under the impact of capital export and imperialist domination – Lenin’s theory has brilliantly withstood the test of time. No social and economic analysis of bourgeois or reformist origin dating from before the First World War has retained today any validity whatsoever, while Lenin’s conception of monopoly capitalism, combined with the theory of the permanent revolution, remains the essential key for understanding present-day reality – the succession of world wars, the opening of an epoch of revolutions and counterrevolutions, the appearance of fascism, the triumph of the proletarian revolution in Russia, Yugoslavia and China, the increasing role of the armament and war industry in the capitalist world, and the importance of colonial revolutions, to name the more obvious. This does not mean that every part of Lenin’s theory retains 100 percent validity and that, as in the Stalinist manner, Marxist theoretician and revolutionary leaders should content themselves today with paraphrasing or interpreting Lenin’s Imperialism to explain contemporary reality. Historical experience of the last fifty years has proven that: An epoch of monopoly capitalism has followed the capitalism of free competition. Monopoly capitalism results from technical revolutions (internal combustion engine and electricity replacing steam as the essential motive power) and from structural changes in capitalism (concentration of capital resulting in giant enterprises predominating in heavy industry, establishment of cartels, trusts, holding companies, etc.). Monopoly capitalism does not overcome the fundamental contradictions of capitalism. It does not overcome competition but merely raises it to a higher level encompassing new and bigger competitors. It does not overcome crises but gives them a more convulsive character. Two rates of profit are substituted for the average rate of profit of the previous period: the average rate of monopolist profit; and the average rate of profit of the non-monopolized sectors. The suppression of free competition within certain bounds is essentially a reaction against the threats to monopolist rates of profit. For this reason it is tied up not only with the artificial limitation of production in certain sectors, but also with the frantic search for new fields of capital investment (new industries and new countries). Hence imperialist wars. In this respect Lenin’s remarks on the tendency of monopoly capitalism to arrest technical progress should be slightly modified. It is true that the monopolies strive to monopolize research and suppress or retard the application of many technical discoveries; but it is equally true that monopoly capitalism also calls forth an increase in these technical discoveries. One reason for this is the monopolies themselves need to open new sectors of exploitation in order to have an outlet for their excess capital. Experience has shown, especially in the chemical, iron, electronics and nuclear domains, that the last fifty years have at least been as fertile in technical progress as the preceding fifty years. Beside these fundamental characteristics which remain valid, some secondary characteristics should be modified: Finance capital: The control and domination of industrial capital by finance capital has proved to be a passing phenomenon in numerous countries (United States, Great Britain, Japan, Belgium, Netherlands, etc.). Thanks to the accumulation of enormous super profits, the trusts are expanding more and more by self-financing and are freeing themselves of bank tutelage. Only in the weaker or more backward capitalist countries does finance capital remain predominant. apital export: The export of capital continues to represent a safety valve for the over-capitalized monopolist trusts, but this is no longer the main safety valve, at least in the United States (except in the oil industry). Government orders are the main safety valve. The increasing role of the State as guarantor of monopolist profit, and the increasing fusion of the monopolists with the State are today the main characteristics of declining capitalism. They spring as much from social and political as from economic causes (colonial revolution, industrialization of backward countries, narrowing of operational field of capital in the world, etc.). The layer of coupon-clippers unique to parasitic imperialism has been reduced rather than extended following the structural transformations mentioned above. The big trusts finance their investments more by self-financing than by issuing negotiable shares. There is a bureaucratization of monopolist capital, and the structure rests more and more on a hierarchy of big administrators (executives), who are most often themselves big or medium share-holders. The parasitic character of declining capitalism appears above all in the enormous extent of unproductive expenditures (in the first place armaments, but also the maintenance of the state apparatus), and in the enormous costs of distribution (valued at more than 30 percent of the national income in the United States). Today, political factors – such as the rising colonial revolution – are increasingly combined with fundamental economic characteristics to give capitalism its particular outlines and behavior. The Critics Bourgeois (and reformist) theoreticians have generally been very tardy in contesting the Marxist conception of the new phenomena which appeared in the capitalist world of the 20th century. In fact, they have seemed hardly aware of the existence of these phenomena. To be convinced of this it is sufficient to run through the main subjects with which they were preoccupied and which they discussed in the years preceding the First World War. While Kautsky, Hilferding, Luxemburg, Lenin Trotsky, Parvus, the Dutch Marxists grouped around De Nieuwe Tijd, and the Austro-Marxists around the young Otto Bauer devoted their economic research to the phenomena connected with monopolist imperialism, the bourgeois economists, apart from a few outsiders, were discussing monetary phenomena, prolonging the polemic of the marginal utility school against the labor theory of value school, and concentrating on the development of the theory of market equilibrium under conditions of perfect competition. Twenty years later bourgeois political economy became aware of the “fact” of monopoly, and began to seriously develop a theory of economic crises and cycles. This lag continues to prevail: until about 1935 the capitalist theories of economic crises fed on crumbs falling from the table of the Marxists; the capitalist theories of the Soviet economy are even today exclusively inspired by old Marxists or pseudo-Marxists. All this confirms once again the correctness of the comment made by Marx some 80 years ago: after Ricardo bourgeois thought in economic matters became fundamentally sterile because apologetic. The majority, if not all, the bourgeois conceptions of imperialism and monopoly capitalism possess this pronounced apologetic character. They constitute an ideology in the Marxist sense of the word: they are not theories elaborated to explain reality. They are conceptions formulated to justify (and partly conceal) the existing reality. The Theory of “Super”-Imperialism This apologetic character appeared most clearly in the reformist conceptions of monopoly capitalism as they were developed in the last years before the First World War (particularly by Kautsky) and put forward in the twenties (especially by Kautsky, Hilferding and Vandervelde). The barrenness of these conceptions is the most striking manifestation of the lamentable theoretical breakdown of Kautsky and Hilferding, a breakdown which followed their political betrayal. Starting from the inevitability of a supreme concentration of capital, the reformist theoreticians approve this development and discover in it surprising virtues of economic and social harmony. Just as the cartels and trusts suppress competition to a very large extent, so also the anarchy of production and the crises which it provokes can be abolished by the monopolies. The latter are interested in completely reorganizing economic and social life to avoid needless expenses which costly conflicts incur (crashes, strikes, etc.). Just as the great captains of industry learn to reach an understanding among themselves, so also they learn to reach an understanding with the labor unions. The labor movement should neither oppose the cartelization of industry nor defend small industry against big. On the contrary, they say, the labor movement should support all tendencies towards a maximum concentration of industry, towards the leadership of the trusts, towards the organized economy. Thus, the stage of monopoly capitalism can represent a transitional stage between capitalism and socialism during which the contradictions and conflicts can gradually be lessened. The development of the last forty years has completely contradicted this analysis and these forecasts. Imperialism and Kautsky’s “super”-imperialism (complete predominance of one imperialist power because of the supreme concentration of capital), far from assuring universal peace, have caused the outbreak of two bloody world wars and are preparing a third one. Far from being able to avoid crises, monopolies precipitated the most violent crisis ever known by capitalism, that of 1929-1933. Far from lessening social conflicts, the trusts have opened an almost uninterrupted period of revolutions and counterrevolutions on a world scale. The fundamental methodological error of these reformist conceptions is their blindness to the contradictory, dialectical character of capitalist evolution, to the concentration of capital. They draw completely mechanical conclusions. It is true that modern capitalism’s tendency to set up trusts, cartels, and monopolies cannot be reversed. It would be completely utopian to want to return to the free competition of the 19th century. But there are two methods of fighting trusts: to substitute for them the small, scattered industry of the past; or to substitute for them the socialized industry of the future. On the pretext that the first form of struggle is impossible, the reformists conveniently forget that the second one exists, and they conclude that it is necessary to defend the monopolies. When the European steel cartel was established, Vandervelde published an article celebrating the event as the guarantee of peace in Europe! On the pretext of not wanting to turn back, the reformists accept the existing reality and conceal the deep contradictions which periodically rend this reality asunder, contradictions which impose upon Marxists the duty to support the only forces which can prepare the future. The reformists’ inability to comprehend the contradictory character of monopoly capitalism is above all an ignorance of uneven development. The simplified formula: “The more monopolies there are, the less competition there is, and the less conflict there is,” does not stand up to the test of facts. In reality, the more monopolies there are, the more a new form of competition – competition among monopolies, imperialist wars – replaces the old form of competition. Beginning with the great 1929-1933 crisis, the majority of the reformist parties tacitly abandoned these propositions of mechanical, reformist Marxism. But this “progress” was accompanied by an even more pronounced theoretical retreat: the abandonment – in general equally tacit – of Marxism as a whole, and the adoption of the Keynesian economic theories. Today, in the reformist ranks, one no longer encounters tendencies which are openly apologetic of monopolies. Instead, the reformists now defend the directing role of the capitalist State. Monopolies, “Duopolies” and “Oligopolies” The apologetic character of bourgeois conceptions of contemporary capitalism is equally clear. The majority of economists and sociologists, describing the structure of capitalism, question the very existence of monopolies. However, only the most partial (or the most ignorant), lean on secondary features like the periodic increase in the number of retail shops, service stations and repair shops to defend the thesis that there is no considerable concentration of capital. The more intelligent bourgeois ideologists no longer deny the preponderant part played by trusts, cartels, holding companies, etc., in contemporary capitalism. But they deny that we are dealing with monopolies here, for, so they say, in the majority of the great industrial sectors (steel, chemicals, motor cars, electrical equipment, aircraft, aluminum and non-ferrous metals are the main ones) there is not one company predominating in each country, but several (“duopolies”: predominance of two companies; “oligopolies”: predominance of a small number of companies). First of all, this restrictive proposition is only partly true. There are important sectors in the big capitalist countries where two-thirds of the production, and even more, is carried on by one company which possesses a monopoly position in the literal sense of the word: chemicals in Great Britain; petroleum in Great Britain; aluminum in the United States; motor cars in Italy; before 1945, chemicals and steel in Germany; copper in the Congo; electrical equipment in Holland, etc. Furthermore, this restrictive proposition is only a terminological artifice. In calling the structure of contemporary capitalism monopolist, Marxists have never pretended that there was only one firm producing all (or almost all) products in each industry. They have simply stated that the relationship of forces between the small firms, and one, two or three giant firms is such that the latter impose their law in the industry, that is, eliminate price competition. This analysis conforms scrupulously with reality, and it is comical to see the great opponents of Marxism, the most enthusiastic advocates of “free competition,” state solemnly that competition holds sway in today’s capitalist economy – notwithstanding the absence of price competition. Actually, official statistics published by governmental services (especially the US Federal Trade Commission) confirm not only the absence of price competition, but also the denomination of the majority of the industrial sectors of all capitalist countries by one, two or three companies, concentrating within their hands 66-90 percent of production. “Democratization of Capital” A favorite argument or apologists of monopoly capitalism is that the concentration of capital in the giant enterprises (“natural outcome of technical development” as they say) is more than neutralized by the diffusion of ownership due to the growth of share ownership. They quote the examples of large trusts which have issued hundreds of thousands of shares (General Motors, the most powerful trust in the world, has issued more than one million), only a small number of which are in the hands of one family. Consequently, there must be hundreds of thousands, or at least thousands of “owners” of these trusts, and “everybody is on the road to becoming a capitalist.” Recently this argument has been vigorously renewed in the United States, in Switzerland, in Belgium, in Germany and elsewhere, where the bourgeoisie has campaigned for the distribution of shares among the workers of the large enterprises. Let’s begin by putting things back into place. Many trusts are effectively dominated by one single family: the Standard Oil petroleum trust by the Rockefeller family; the General Motors trust by the DuPont deNemours family; the steel trust of the Lorraine by the Wendel family, etc. It is true that in the majority of cases these families do not possess 50 percent of the shares of the companies in question. But this only proves that the flotation of large numbers of shares permits the control of these giant companies by minority shareholdings. Their dispersal effectively prevents the mass of the small shareholders from establishing their rights at the general meetings and in the daily administration of the company. Further, it is false that the ownership of industrial shares is spread over large layers of the population. An enquiry made in the United States in 1951 by the Brookings Institute proved that 0.1 percent of the population possessed 55 percent of all the shares. To the extent that the monopolist trusts become more and more powerful and avoid the possibility of being controlled by a single family, it is characteristic that they progressively become collectively owned by the big capitalists. The interpenetration of the interests of some dozens or hundreds of big capitalist families is such that it becomes impossible to say that such and such family “controls” such and such company. But the whole of these families control the whole of big industry which is directed by a kind of “administrative council of the capitalist class,” on which the representatives of all these families occupy key positions and succeed one another periodically in the positions of command. The Theory of “Countervailing Power” and the State as Equalizer The more intelligent bourgeois economists cannot deny these facts. Nevertheless, in order to justify capitalism they take refuge behind the State, the deus ex machina which is capable of neutralizing the bad effects of this extraordinary concentration of economic power. Among the principal representatives of this theory are the American professors John Kenneth Galbraith and Adolphe A. Berle, and the “Keynesian” group of the London School of Economics. There are numerous variations of this theory; it is sufficient to enumerate and refute some of them. Galbraith and the adepts of the London School of Economics advance the theory that the democratic State of today is not the instrument of the domination of one class but a more or less independent apparatus, subjected to the mutually neutralizing influence of various “pressure groups.” These authors, by the way, never use the work “class” and always prefer to use “pressure group,” “sections of opinion,” “organized influence,” etc. It is true, they say, that the “oligopolist” trusts exercise a very strong influence on economic life. But this influence is “neutralized” (held in check) by the no less formidable power of the mass trade unions, of farmers’ associations, of small and middle capitalists organized in Chambers of Commerce, etc. The interaction of these forces produces an economic equilibrium favorable to the community as a whole, a more or less proportional division of the “economic cake” among the different “pressure groups.” These authors may be simply theorizing on the practice of “lobbying” prevalent in Washington, but their conclusions are absolutely unreal. Even a superficial study of the development of the economic and social policies of the United States makes clear that the “sixty families” exert an influence (even in the absence of particular “lobbies”) quite different from that exerted by the great trade unions with their 16 million members. For nearly twenty years American capitalism has been passing through a period of increased profits and prosperity. From time to time the ruling layers of the bourgeoisie can permit themselves the luxury of dividing a considerably reduced portion of the cake among different social classes and different social layers of the capitalist class itself. In the interests of maintaining economic stability and “social peace,” the big capitalists have learned that it is more effective to avoid the destruction of certain layers which are particularly exposed to competition and the bad effects of the conjunctural swings of economic cycles (farmers and merchants, for example). The government, acting as the “administrative council of the capitalist class” in its entirety, has at its disposal powerful means with which to satisfy, at any given time, this or that particularly dissatisfied layer of society. But all this takes place within the framework of a more and more absolute and open rule of the monopolist trusts within the economy and the State itself. Examination of the figures on the concentration of capital which proceeds more rapidly than ever, on the difference between the rate of profit in the monopolist sector and that in the non-monopolized sectors, and on the greater and greater proportion of the total national income which these profits represent make strikingly clear that validity of Marx and Lenin’s analysis of monopoly capitalism. The “Mixed Economy” A “reformist” variety of the theories of “countervailing power” is the theory of the so-called “mixed economy,” represented by the social democratic followers of the Keynes school, such as Lerner. According to them, today’s economy lost its strictly capitalist character when the State, through huge taxes, concentrated within its hands an important part of the national income (from 25-30 percent in Great Britain and the United States) by its ownership of the public sector of the economy. They consider this the “objective” economic basis for a degree of independence and autonomy by the State apparatus in relation to the monopolist trusts. The American professors Sumner Slichter and Paul Samuelson defend a similar thesis, what they call a “labor” economy. These reformists forget to answer the question, who directs, who controls the State? Who conducts this “public” sector of the economy? A concrete analysis of the question will confirm in each case that the nationalizations of sections of industry carried out in countries like Great Britain and France were nationalizations of basic industries running at a deficit, through which the industries of the key manufacturers have greatly profited, even though many of these had temporarily fought against nationalization for political reasons. The same thing is true of public enterprises in the United States, for example the electrical industry and highway reconstruction. The redistribution of national income by really progressive rates of direct taxation in Western Europe and North America is to a large extent neutralized by no less exorbitant indirect taxation, borne above all by the workers. As already indicated, the State which directs the “public sector” of the economy is a State completely in the hands of the monopolists, and whose personnel is usually composed directly of the monopolists themselves. Under these conditions, the appearance of a powerful “public sector” in the economy does not prove that the economy has lost its capitalist character. It merely confirms that fact that, in the period of accelerated decline, monopoly capitalism cannot survive on the basis of laissez faire, but needs growing intervention of the State in order to guarantee its monopoly profits. There remains finally the more intelligent version of this theory, expounded by A.A. Berle in The American Revolution (a remarkable work on the distribution of shares of the big American companies), and by the publishers of Fortune magazine under the surprising title of The Permanent Revolution. These authors acknowledge that one hundred monopolist trusts directly control almost half the industrial production of the United States, and indirectly determine the conditions of a large part of the other half. But, so they say, these trusts are like the great feudal lords of the Middle Ages. So great is their power, which can decide the fate of so many thousands of people, that the trusts cannot allow themselves to be guided in their decisions exclusively by economic imperatives, by the quest for profit. If they decide to close their factories in one city and condemn a local community of 300,000 inhabitants to mass unemployment, this will have social and political as well as economic consequences. The very power of the trusts thus imposes a limit to their power, and represents the source of a “counter-balance” which is created in the form of a “public responsibility,” a “public right,” a “right to consider the public,” a “growing intervention of the public authorities,” etc. In order to avoid a direct attack upon them, the trusts have transformed themselves into some sort of “benevolent lords,” into “enlightened despots.” Berle himself uses this formulation! Their great discovery is the development of a higher standard of living for the “new American middle class” of tens of millions of technicians, merchants, clerks, and skilled workers whose fate is intimately tied up with that of the trusts for whom they work. This same theory is at present fashionable in Great Britain where the Labor right wing explains, for example, that the demand for the nationalization of the ICI chemical trust has run up against the resistance of the workers at this plant. In West Germany the trusts have created privileged conditions of work for their permanent employees, in comparison with the conditions of work in the small and middle enterprises. But there is nothing surprising in this. It is nothing but a repetition of the phenomenon of a workers’ aristocracy, made possible by temporary super profits. To see in this a structural transformation of the capitalist regime is to mistake the shadow for the substance. The Ageing and Stagnation of Capitalism It is among the supporters of Keynes and his continuers that some of the more serious non-Marxist conceptions of the nature of contemporary capitalism are found. Thus, the main American disciple of Keynes, Professor Alvin Hansen, has developed the notion of “ageing capitalism,” whose maturity is characterized by the fact that the already acquired stock of fixed capital takes on such huge proportions as to become more and more an obstacle to new productive investments. This is simply the Marxist conception of the tendency of the rate of profit to fall, caused by the increase in the organic composition of capital. In Great Britain, Joan Robinson, who oscillates between Keynes and Marx, has thrown light on the same phenomenon and has at the same time made sound studies of what she calls “monopolistic competition” (competition among monopolies). However, these bourgeois authors following even this road arrive at reformist and apologetic conclusions: “ageing” capitalism is a capitalism which grows “wiser,” which has greater and greater recourse to (and need of!) a more equal redistribution of the national income to assure the satisfactory functioning of the economy, which permits a more and more efficient running of the economy by the State, etc. Some of these disciples of Keynes state that, thanks to these tendencies, it is possible to eliminate (or to restrain to the utmost) the capitalist crises through the use of government expenditure which could be productive as much as unproductive. In the last analysis, all this represents nothing but a rationalization of the behavior of the American capitalist class in the Roosevelt era, a rationalization of the role of the armaments and war industry in today’s capitalist economy. Because, in the long run, only government expenditure in the armament sector can absorb surplus production that threatens the economy. “Productive” expenditure inevitably absorbs purchasing power that would be used to buy the products of other productive sectors and does not constitute a compensating outlet. The British economist Colin Clark has developed the idea of “ageing” society in a particular sense. According to him, the more capitalist society matures, the more labor power and economic resources are switched from the productive industries, in the true sense of the word, towards the “service” industries (essentially the sector of distribution). There is in this idea a particle of truth. The huge increase in the cost of distribution is in effect a characteristic of declining capitalism. This does not alter the fact that Colin Clark’s “law” has not in the least the absolute value which he wants to give it. The growth of the so-called “tertiary” industries largely reflects the historical delay in the mechanization and automation of the distributive, banking and insurance trades, a delay which could be rapidly overcome, with striking consequences for the structure of the working population. Industrialization of Underdeveloped Countries There remains a last aspect of Marx and Lenin’s theory of imperialism, which is often criticized by capitalist, and particularly reformist economists: this is our conception of the impossibility of a serious industrialization of the colonial and semi-colonial countries under the aegis of imperialism and the “national” capitalist class. As far as the past is concerned, no serious author dares to doubt the validity of this thesis for the facts speak far too eloquently. But, so they say, after 1945, and especially after the victory of the Chinese Revolution, capitalism, in particular American capitalism, has “thought things over.” It has understood that the misery of the underdeveloped countries favors the “growth of Communism.” It is prepared to grant them very great help to build a “barrier against the Reds.” Imperialism is interested from another angle, since capital exports and new outlets thus created furnish it with the famous “compensating outlets” which it lacks. Some go so far as to speak of the possibility of “decades” of peaceful development based on the industrialization of backward countries thanks to foreign investments. Unfortunately for them, the facts paint another picture. Since the end of the Second World War private exports are, to the majority of these countries, lower than they were in the period following the First World War. Particular exceptions (notably as far as the American oil industry is concerned) immediately indicate the limits of the phenomenon. Responsible capitalist associations – notably the world conference of the Chambers of Commerce – have repeatedly explained quite frankly the reason for this state of affairs: the insecurity which reigns in the colonial and semi-colonial countries, and threat of revolutions, of confiscations, of nationalizations without compensation, etc. For the alluring prospects to be realized, it would be necessary to change completely the political and social climate in the backward countries; and as such a transformation is not at all foreseen. Even where very favorable political conditions for imperialism exist, capital investments are concentrated in the extraction of raw materials, trade, transport, and banks, and not in the creation of an indigenous secondary industry. In connection with this subject the economic development of countries like the Philippines, South Korea, Formosa, Thailand, Turkey and the Central American republics in the clutches of Washington should be particularly studied. In order to show the lack of realism of the partisans of these “harmonious” conceptions, let us quote two figures. In the midst of World War II, Colin Clark wrote a book entitled The Economy of 1960 in which he foresaw that the industrialization of India would absorb, between the end of the war and 1960, 60 billion dollars of British and American capital. These are in effect the needs of this huge country if it is to become an industrialized society. Now, since the end of the war, that is, during the ten years 1945-54, India has received in all only 1.5 billion dollars of “Western” capital. Even if everything should proceed “normally” for capitalism, this country will not have received 10 percent of the capital foreseen by the optimistic economist by 1960. This underlines the impotence of bourgeois economic and sociological thought to counterpose to Marxism anything but myths, illusions, or lies. August 1955