This letter deserves a reply because the question Berg poses is at the heart of understanding the political reality facing humanity today.

In its popular sense, imperialism—based on the word “empire”—refers to a dominant power that exaggerates its contribution to human culture and ideas in order to rationalize marching off to dominate the world. Rome and its legions are one example. Washington—the self-declared “indispensable nation”—and its main rivals are imperialist in that broad, popular sense, but it’s the more specific Marxist definition that the Militant makes use of.

Imperialism in the modern sense is a system in which financial and industrial monopolies dominate the economy and a handful of major powers contest with each other for control over the planet’s resources. It was described in detail by V. I. Lenin, the central leader of the October 1917 Russian Revolution, in his pamphlet Imperialism, the Highest Stage of Capitalism.

In this booklet, written in 1916, Lenin laid bare the origin and economic workings of imperialism as a stage of development of the capitalist system. Using data compiled by bourgeois economists of his day, he pointed to its five defining features.

First, he wrote, imperialism’s origins lay in the enormous growth of industry and the rapid concentration of production in larger and larger enterprises. Democratic and Republican politicians alike sing the miracles of “free enterprise.” But the lawful workings of capitalism long ago transformed “free competition”—a feature of capitalism in its infancy—into its opposite, with the advent of large cartels and trusts. Such associations, Lenin wrote, “divide the markets among themselves. They fix the quantity of goods to be produced. They fix prices. They divide the profits among the various enterprises.”

Second, a similar process occurred in banking, as smaller banks were swallowed up by the emergence of larger and larger banking monopolies. Lenin gave many examples. In one, nine German banks held 83 percent of the bank capital in the country by 1909.

These large banks become more and more intertwined with the large industrial monopolies to form finance capital. “A personal link-up, so to speak, is established,” Lenin wrote, “between the banks and the biggest industrial and commercial enterprises, the merging of one with the another through the acquisition of shares, through the appointment of bank directors to the Supervisory Boards (or Boards of Directors) of industrial enterprises and vice versa.”

Third, the development of finance capital in a handful of the advanced capitalist countries led to the accumulation of an enormous “superabundance” of capital. This abundance results from the fact that under capitalism such surpluses can never be used to raise the standard of living of those who work in the factories and on the land, because to do so would cut into the profits of the capitalists. Instead, it is exported for investments to exploit “underdeveloped” markets abroad. Lenin explained that in these markets “profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap.”

This growth of surplus capital accelerates the development of a class of bondholders and rentiers who take no part in production, are professional idlers, and live by clipping stock market coupons.

Fourth, the imperialist epoch has been marked by the formation of international capitalist monopolies that divided the world among themselves. Between 1907 and 1911, for example, the two “Great Powers” in the electrical industry—General Electric Co. in the United States and A.E.G in Germany—reached an agreement that gave GE the United States and Canada and A.E.G. most of Europe, including Turkey and the Balkans. Similar arrangements were reached in international steel and oil markets, along with shipping and railways.

Fifth, Lenin described how the strongest capitalist powers completed the division of the whole world among them—that is, “the colonial policy of the capitalist countries has completed the seizure of the unoccupied territories on our planet. For the first time the world is completely divided up, so that in the future only redivision is possible,” Lenin wrote.

This drive by the strongest imperialist powers to redivide the world’s resources in their favor led to World Wars I and II, just as it led to the two assaults on Iraq headed by Washington over the past decade. The drive to war as the inevitable consequence of imperialist decay will be one of the subjects of a second installment of this reply.
 
 
Related article:
Imperialism is not a ‘policy’  
 
 
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