Imperialism: The Highest (or lowest) Stage of Leninist Theory

A large part of Lenin's claim to being a groundbreaking theoretician of Marxism rests on his theory of "imperialism". It is often assumed by self-described "Marxists" to be inherently correct. This is especially since it allows Stalinists and Trotskyists to draw distinctions between the kinds of states they like (communist states, national liberation regimes, regimes in conflict with the west such as Syria and Iran) and those they don't (the U.S., NATO, the EU, ect.). But how correct is Lenin's theory? Is it really such a groundbreaking achievement in analyzing the capitalist world system? In point of fact, no. Lets start by outlining what exactly Lenin's theory says.

In "Imperialism: The Highest Stage of Capitalism" Lenin argues that imperialism is a particular stage of the capitalist world system. Monopolies and large trusts backed up by the state through colonialism and geopolitics have replaced free competition between producers on the market. These monopolies, hooked up to finance capital, have created a world system based on powerful states that exploit the world to enrich and sustain the monopolies of the bourgeoisies they represent. This has been the result of the natural mechanisms of capitalist accumulation concentrating capital, profits, state power, and finance into powerful geopolitical and economic hands. At first glance this may seem perfectly correct, or even obvious.

Formal colonialism was certainly about economic exploitation of the colonies by powerful western states. Even in the "post-colonial" era the powerful states (settler colonial societies and the former colonial empires no less) control core (the most profitable) production processes to the exclusion of states less powerful than them (often former colonies, or even modern colonies in the case of Porto Rico). This clearly leads to a situation where powerful states hold economic monopolies through the exploitation of less powerful nations. Lenin's incorporation of finance into the equation may seem especially relevant today since the "neoliberal" period of capitalism has brought with it "financialization" of the world economy. Despite the seeming obvious nature of what Lenin pointed out, the specific analysis is flawed on a number of levels.
Political Economy Vs Marxism

The first issue in Lenin's analysis we will touch on is the nature of his theory of imperialism as "political economy", rather than critique of capitalist production (in the vein of Marx's critique of political economy). The political economists, or those who came up with the theories of the capitalist economy that would become mainstream economic doctrine, viewed the relations of capitalist society as external matters. What was important to the political economists (such as Adam Smith) was the outward relation between the state, the market, labor, capitalists, ect. Political economy's approach to understanding capitalist society is analyzing how, at any given moment, the actors and institutions relate to each other in that society. Marx's approach was very different.

Marx, instead, understood capitalism through it's foundational relations. He interrogated the basic relationships to labor, tools, and the social labor process which people possessed that made up the capitalist mode of production. Marx was not concerned from the start with what policies the state might enact and how they might effect the market, labor, and capitalists, for example. Marx was concerned with what in the capitalist mode of production necessitated the presence of the capitalist state. Marx and other Marxists found themselves retreating from this foundational analysis of social relations, back to the political economic analysis of the outward relations between people and institutions, in times of specific political events. This is what Lenin and others did in developing their relevant theories of finance and monopoly capital.

At the time Lenin was concocting his analysis the capitalist world economy had in many ways returned to past outward practices of state involvement in that world economy. The state was intervening in the world market in major ways creating the monopolistic and protectionist tenancies Lenin observed. This was the temporary outward relation that the state had to the various flows of the world market and was not to last after this period. This kind of analysis of trusts, monopolies, and formal colonialism hardly seems applicable to the neoliberal period where states are concerned with protecting "free trade", post-Washington Consensus where protectionist development was rejected by states across the world system at the United States' behest.

In analyzing this temporary relationship and configuration of the world market and the states Lenin had retreated from the analysis of the foundational relations of the capitalist world system Marx had undertaken, back into political economy, which serves to mask those relations.

Empirical Claims

Empirically Lenin's analysis claims that monopoly replaced "free competition" among producers in the imperialist period. This is an empirical claim which needs to stack up to the actual facts of the world accumulation process. It in fact, does not stand up to these facts.

Capital does indeed tend to accumulate in fewer and fewer hands. This does not, however, eliminate free competition. As Charles Post explains, open competition and monopoly are both constant moving parts of capitalism, thus there is no period where one, or the other, is phased out.1 This is because capitalist accumulation is a process of competition for leading industries and a corresponding cycle of partial monopolies.

When a firm develops a new, cutting edge, and thus profitable industry, they maintain control over the industry and it's production process for a period of time. This is a partial monopoly that allows the firm to inoculate itself against competition. However, this very process contains it's own undoing. This partial monopoly invites competitors to develop their own industries to break the monopoly a firm has on core production processes (the production processes of leading industries).Thus the partial monopoly is eventually undone through competition.

If competition and monopoly coexist in capitalist society then there is no epoch where one is dominant and the other replaced. Yet the foundational claim of Lenin's analysis of imperialism is that the imperialist epoch of capitalism replaces free competition with monopoly. This can only lead us to the conclusion that the empirical aspects of Lenin's analysis are wrong in crucial ways.

Political Claims

Surprisingly there is not much that Lenin politically draws out from his analysis of imperialism. For him it was very much intended to stand, for the most part, on it's analytic strengths to inform Marxist theory. Even his ideas on nationalism and national oppression are expressed rather independently of his analysis of imperialism.2 A political claim which does come from his analysis is that of the "labor aristocracy". It has gained much political currency in activist circles.

This is the concept that in the imperialist countries the riches from imperialism flow to a section of the working class in those countries. Thus the working class is effectively bought off through imperialist exploitation. Today there are even "third worldists" who argue that this has taken place to such an extent that the global working class now almost exclusively resides in the global south. This claim is both politically and empirically wrong.

The capitalist class is concerned with making profits which means the exploitation of labor. It only concedes to workers when workers struggle against the capitalist class directly via syndical action (strikes, boycotts, slow downs, protests, ect.). Thus the capitalist class does not use the surplus generated from it's imperial power to buy off workers. This surplus goes directly to the capitalist class, and even more so the process of capital accumulation, not to the workers. In political terms the theory of the labor aristocracy has been used to pit workers in powerful core countries against less powerful peripheral and semi-peripheral countries (as in the case of the aforementioned third worldists). The third worldists use this theory to deny an internationalist socialism based on the global working class and transform the global class struggle into a global nationalist struggle between core and periphery nations, thus obscuring the nature of capitalism as divided between the capitalist and working class.
Conclusion: The Lowest Stage of Theory

Lenin's theoretical contribution to understanding the current capitalist world as "imperialist" is at the same time dated as well as being empirically and politically wrong. Unsurprisingly Lenin's theory has been used to justify the idea that internationally the struggle is between oppressed and oppressor nations. It is true that powerful, core countries, exploit less powerful peripheral and to some extent semi-peripheral countries. However, the nationalist approach to struggle can only go so far. Nationalism requires control of the nation-state which is immediately integrated into the interstate system of capitalism. It is for this reason that the countries created by national-liberation struggles remain subordinate to their former colonial masters on a geopolitical and world economic scale.

Lenin's own opinion of the "national question" was that nations had the right to access and struggle for "self-determination".3 This has always meant very little practically since the nation-state is subordinate to the global structure of the capitalist world system, not withstanding the fact that the traditional national-liberation struggles at the very least achieved the destruction of formal colonialism and were in this sense a net positive. Bottom line; Lenin's theory of imperialism simply won't do as an explanation of the capitalist world system, especially in the neo-liberal period.

In this case what is highlighted is the weakness of "Marxism" post-Marx to understand the world system. While Marx had an intricate, though flawed, understanding of that system, which can and should be built on, his torch bearers rarely provided insights as helpful.

Notes:
1.The Myth of The Labor Aristocracy, C. Post
2.On The National Question, Lenin.
3.ibid

Bibliography:
Imperialism: The Highest Stage of Capitalism, V.I. Lenin
Antisystemic Movements, Arrighi, Hopkins, Wallerstein
The Relationship Between Marxism and Indigenous Struggles and Implications for the Theoretical Framework For International Indigenous Struggles, R. Dunbar-Ortiz
The Myth of The Labor Aristocracy, C. Post