Imperialism is the monopoly stage of capitalism | Lenin’s assertion | | Kimani, Tabitha Wangari –X74/3507/2011 | XEA 102:INTRODUCTION TO POLITICAL ECONOMYLecturer Fred NjonyoBachelor of EconomicsUniversity of Nairobi | 27-May-12 |

Thesis describes the function of financial capital in generating profits from imperial colonialism, as the final stage of capitalist development to ensure greater profits. |

INTRODUCTION
In order for capitalism to generate greater profits than the home market can yield, the merging of banks and industrial cartels produces finance capitalism, the exportation and investment of capital to countries with under-developed economies. Then, such financial behaviour leads to the division of the world among monopolist business companies and the great powers. Moreover, in the course of colonizing undeveloped countries, Business and Government eventually will engage in geopolitical conflict over the economic exploitation of large portions of the geographic world and its populaces. Therefore, imperialism is the highest stage of capitalism, requiring monopolies (of labour and natural-resource exploitation) and the exportation of finance capital to sustain colonialism, which is an integral function of said economic model. Furthermore, in the capitalist homeland, the super-profits yielded by the colonial exploitation of a people and their economy, permit businessmen to bribe native politicians: labour leaders and the labour aristocracy : to politically thwart worker revolt ;hence, the new proletariat, the exploited workers in the Third World colonies of the European powers, would become the revolutionary vanguard for deposing the global capitalist system
Imperialism is the domination of underdeveloped areas by industrialized countries as the consequence of different economic and technological levels and unequal power potential resulting from a different economic growth.
Monopoly is a market situation where one producer (or a group of producers acting in concert) controls supply of a good or service, and where the entry of new producers is prevented or highly restricted.
Capitalism is the economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

BODY

1. Lenin on Imperialism as a New Stage of Capitalism
Lenin argued that modern imperialism (or capitalist imperialism) constitutes a new stage in the history of capitalism.
The first stage- Was the competitive form of capitalism characterized by relatively small-scale enterprises, few of which dominated their market.
The newer stage- The imperialist stage, is characterized by huge monopolistic or semi-monopolistic (oligopolistic) corporations. However, there are degrees of monopolization, and Lenin wanted to emphasize that at the fundamental economic level what had most changed was that there was major aspects of monopoly in this new stage of capitalism.

2. Lenin’s five point definition of imperialism
Lenin held that imperialism was a stage of capitalist development with five simultaneous features: 1) Concentration of production and capital has led to the creation of national and multinational monopolies - not as understood in liberal economics, but in terms of de facto power over their enormous markets. Producers have been captured by imperialistic capital that shapes the kind of production. It does not allow producers to increase the value of their products as it would undermine the whole philosophy of reducing input capital.

2) Industrial capital as the dominant form of capital has been replaced by capital. The form of imperialism trending the world id where financial capital is dominating above other capitals hence the merger between the banks and some industries. That is, bank capital and industrial capital have entered into a partnership where particular investments are conducted virtually through monopolistic investments. The scarcity of capital in the third world countries introduces imperialistic capital with raw opportunities to exert domination, influence and exploitation.

3) The export of the aforementioned finance capital is emphasized over the export of goods. In a sense, this shifting of production to the Third World has been an outgrowth of the previous export of considerable amounts of capital to the “periphery” of the imperialist empires. (Most investment still goes not to the periphery, but to other advanced capitalist countries, however.) The other imperialist countries also have huge investments abroad, although the United States is by far the biggest investor in other countries and owns as much abroad as do the next two largest investor countries, Britain and Germany combined. But despite this, and despite the obvious importance of material trade in both directions, the export of capital itself remains of tremendous importance to capitalist imperialism.

4) The economic division of the world by multinational enterprises, and the formation of international cartels. However, Lenin did believe that the international cartelization of industry was itself a central and permanent feature of capitalist imperialism, even if individual cartels might themselves collapse and reform. But the past century has proven that international cartelization is much less central and significant in the history of capitalist imperialism than Lenin’s theory predicted. So we have to correct Lenin’s theory on this point. While a new round of international cartelization may yet arise as part of the development of this new period of globalization, so far this new intensified globalization has meant a somewhat heightened economic competition between the MNC’s controlled by the different national bourgeoisies. There are many centrally important multinational corporations, which seem to support Lenin’s thesis. Also called transnational Corporations .Yet, most multinational corporations are really controlled by the capitalist-imperialists of one or another single country.

5) The political division of the world by the great powers, in which the export of finance capital by the advanced capitalist industrial nations to their colonial possessions enables them to exploit those colonies for their resources and investment opportunities. This super exploitation of poorer countries allows the advanced capitalist industrial nations to keep at least some of their own workers content, by providing them with slightly higher living standards. Today neo-colonialism is the dominant and preferred method of control and exploitation of the Third World on the part of all imperialist countries.

Summary of Lenin’s Five Points It seems fair to say that most of what Lenin wrote about imperialism is still quite valid. At least four of his five defining points seem to have been confirmed by the history of the past century, and there is at least a germ of truth to the fifth point as well. It is true, however, that there have been some developments that Lenin did not foresee, or at least did not fully foresee and sufficiently emphasize. Among these are: 1) Full-scale international cartelization was not a permanent or necessary aspect of capitalist imperialism. Lenin was quite right in seeing the world under imperialism as being dominated by a fairly small number of truly giant corporations, however. 2) Neo-colonialism would eventually supersede open colonialism in most parts of the Third World. 3) While Lenin was right to criticize Kautsky‟s notion of “ultra-imperialism” it seems he did not sufficiently appreciate the possibility that at times there might be one top dog among the imperialist powers. This is a little strange given that Britain had for a while already played something close to this role in the latter part of the 19th century. 5) While Lenin of course viewed the state as an agency of the capitalists, and therefore the imperialist state as an agency of the imperialists which exists in order to carry out their interests, it seems he did not foresee the greatly expanded role the state would soon begin to play in managing the national economy. Nor did he foresee the development of international financial agencies (such as the IMF and World Bank) and the important role they would come to play.

6) According to lenin, imperialistic capital ensures creation of mass culture by intergrating economies, done by building a formidable political networkthat influences political decisions.