4. Export of Capital¶
Core Argument¶
In this chapter, Lenin establishes the export of capital as the defining economic feature of the monopoly stage of capitalism, distinguishing it from the export of goods which typified the earlier era of free competition. He argues that the emergence of monopolist associations in advanced capitalist countries, combined with the monopolist position of a handful of wealthy states, has produced an enormous surplus of capital. This surplus cannot find profitable domestic investment because capitalism necessarily entails the backwardness of agriculture and the poverty of the masses—conditions which are not accidental failures but fundamental premises of the mode of production. Lenin polemicises directly against petty-bourgeois critics who suggest capitalism could resolve this by raising living standards; such a course would mean declining profits and is therefore impossible under capitalism.
The only outlet for surplus capital is export to backward countries, where capital is scarce, land and labour are cheap, and profits are high. Lenin provides a table showing the growth of capital invested abroad by Britain, France, and Germany from 1862 to 1914, rising from 3.6 billion francs (Britain alone) to between 175 and 200 billion francs total on the eve of the war. At a modest 5 per cent return, this yields an annual income of 8-10 billion francs, which Lenin calls “a sound basis for the imperialist oppression and exploitation of most of the countries and nations of the world.”
A second table breaks down the geographical distribution of this capital circa 1910. British capital is concentrated in the colonies and America; French capital is primarily in Europe, especially Russia, and takes the form of government loans rather than industrial investment, leading Lenin to characterise French imperialism as “usury imperialism.” German capital is more evenly divided between Europe and America. Lenin notes that the export of capital accelerates capitalist development in recipient countries, even as it may arrest development in the exporting countries.
The chapter then examines the concrete mechanisms by which capital export secures advantages for the creditor nations. Lenin cites a passage from the Berlin review Die Bank describing a “comedy” on the international capital market, where money markets compete to grant loans for fear of being forestalled, and the creditor nearly always secures extra benefits: favourable commercial treaties, coaling stations, harbour contracts, or arms orders. The export of capital thus becomes a means of stimulating commodity exports, with transactions between large firms and banks “bordering on corruption.” Lenin gives specific examples: France squeezing concessions from Russia in the commercial treaty of 1905, the tariff war between Austria and Serbia partly caused by competition to supply war materials, and French firms supplying 45 million francs of war materials to Serbia between 1908 and 1911. He also cites a report from the Austro-Hungarian consul in Brazil showing that railway construction loans stipulate orders for railway materials from the creditor country.
Lenin concludes by noting the envy of German imperialists toward the “old” colonial countries with extensive banking networks in their colonies, and provides figures: Britain had 50 colonial banks with 2,279 branches by 1904, France 20 with 136, while Germany had only 13 with 70. American capitalists, in turn, complain about German and British dominance in South America. The chapter ends with the claim that capital-exporting countries have divided the world among themselves “in the figurative sense,” but that finance capital has now led to the actual division of the world.