Imperialism as the Highest Stage of Capitalism and Modern Global Economy

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Essay in Microeconomics “Imperialism as the highest stage of capitalism and modern global economy” by Tania Mousel

 
Introduction
 
Probably no other country in the world has gone through more complex and radical changes in its history over the last 100 years than the Russian Federation. In the last century this vast and diverse territory went from being an empire to being the main part of the Soviet Union, to being a liberal democracy. One of the key characters of the early developments was Vladimir Lenin. Born in 1870 in Simbirsk, he became involved in left politics already as a young adult, and even had to live in exile in different parts of Europe during the last 20 years of the Romanov Empire. He came back to Russia after the February Revolution in 1917, and after the October Revolution, he became the leader of the new founded SFSR and the prime minister of the Soviet Union from 1922 until he died in 1924. The essay analyzed in this document, “Imperialism, the Highest Stage of Capitalism”, was written during his exile in Zürich in 1916. Imperialism is the creation and maintenance of a country's power and influence through military force. Capitalism is an economic system based on the private ownership of capital goods and the means of production, with the creation of goods and services for profit. The problematic discussed in Lenin’s essay is about the damage that imperialism does to the economy, inspired of the events happening at that time, the First World War. In this work, in a first part, Lenin’s essay will be analyzed in more detail and in a second part it will be compared and put in relation to the modern global economy.

Imperialism, the Highest Stage of Capitalism
 
As a socialist and Marxist, Lenin condemned capitalism and based his works on the earlier theories by Karl Marx. He modified them and developed them further. His essay about imperialism as the highest stage of capitalism is a sort of synthesis of his previous works on Marx’s theories. In the preface of the German and French versions of his essays for example, he describes the war as “an annexationist, predatory, plunderous war among monarchic empires”. This he bases on an analysis of the different parties and their motivations during the war. In all the different countries participating in the war, the core elements of what is described as capitalism could be found. A selected elite of a few, owning most of the land and renting it out to the little people so they can use it for agriculture and have to pay their landowners rent. The ruling class called it private property, based on the labor of the small proprietor, a free competition and a democracy. This opinion was not shared by everyone. Lenin talks in his essay about the oppression of the work force, the concentration of production and monopolies. The first example brought up, is Germany. With the industrialization, and to fully profit from the economies of scale, a few big companies started to develop. Even though there were at that time only a few thousand large enterprises and a million small ones, employing up to 5 people, over three fourths of the energy produced was used by the large companies, and the small ones, constituting 91% of the total companies, only used 7%. It was the principle of a few thousand huge enterprises being everything and millions of small ones being nothing. In another example, Lenin talks about the United States of America, which was considered the antipode of the Soviet Regime, a country of modern capitalism. Here the concentration of production was even greater. In 1909 almost half the production of all enterprises of the country was produced by only one-hundredth part of the total enterprises. These examples show, that what classical economists called perfect competition did not exist in the real world. Free competition says Lenin always leads to the concentration of production, which will lead to the formation of cartels and finally, at one...
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