From Colonialism to Imperialism

Controversial Issues on National Question

Elif Çağlı

August 2002

Formation of monopolies and transition period to imperialism

Transformation of the tendency of capitalist expansionism from colonialism to imperialism involves a certain historical process. In the last period of this process a huge quantitative expansion in capitalist colonization is observed because of the reasons mentioned above. Thus, those years of formation of imperialist expansionism appear as if the peak of colonialist expansionism. This was just a transition period. Now let us briefly deal with this period.

At the end of the period called free competition capitalism, a transition era (1870-1900) took place in which competition led to monopolization and thus capitalism moved forward towards the imperialist stage. The need of leading industrialised capitalist countries rivalling each other for cheap raw material supplies was incredibly increasing in this transition period. Therefore the transition period from colonialism to imperialism was accompanied by a colonialist leap in which those capitalist countries expanded their colonial territories and divided the world on that basis.

On the other hand capital exports from developed capitalist countries to colonies and semi-colonies became important. Leading capitalist countries began to construct the necessary substructure (like railways) for reducing transportation costs for the manufactured goods they produced and the raw materials they imported from others, also in a drive to develop the world commerce as much as possible. Those years were not the imperialist period itself, in which dominance of finance capital put its remark on the world, but rather a period of preparation and fermentation for it. Lenin did not agree with those assessments presenting 1870s as the beginning of imperialism: “For Europe, the time when the new capitalism definitely superseded the old can be established with fair precision; it was the beginning of the twentieth century.”[1]

Between 1870 and 1900 when developed capitalist countries expanded their colonies, formations like monopolist associations and cartels were not widespread despite having showed an important progress. Lenin tried to expose the transformation of capitalism to imperialism with its main turning points:

Thus, the principal stages in the history of monopolies are the following: (1) 1860-70, the highest stage, the apex of development of free competition; monopoly is in the barely discernible, embryonic stage. (2) After the crisis of 1873, a lengthy period of development of cartels; but they are still the exception. They are not yet durable. They are still a transitory phenomenon. (3) The boom at the end of the nineteenth century and the crisis of 1900-03. Cartels become one of the foundations of the whole of economic life. Capitalism has been transformed into imperialism.[2]

After examining the formation process of the finance capital through the fusion of banking capital with industrial capital, Lenin concluded: “Thus, the twentieth century marks the turning-point from the old capitalism to the new, from the domination of capital in general to the domination of finance capital.”[3]

However, first years of 20th century were pregnant with storms which would not allow one to concentrate on the economic analysis of this new capitalism which would continuously rise throughout this century. For instance, debates on the attitude of communists against the First World War indispensably became a matter of primary importance. In debates of the revolutionary Marxists the question of colonies gained importance which was put on the agenda by the war of re-division of the world. Because of the concrete conditions of that period, the foresights regarding the end of the war put emphasis on matters like a shift in the possession of existing colonies and complete colonization of the semi-colonies. Between 1876 and 1900, while Germany, Italy and France were gaining new colonies in order to compete against colonialist England in the same line, world became divided up territorially. The result of the competition on this basis could only be re-division of already divided lands, so to say, to covet each others’ colonies and to colonize those countries that had drifted to the position of semi-colonies. This reflects one aspect of the reality of that period, though a striking one.

These were indeed burning questions of that period and also subjects of the theoretical struggle Lenin carried out against the social-chauvinist trend in the Second International. Kautsky’s “ultra-imperialism” analysis included the lie that capitalism’s new stage might bring an end to wars and open a new epoch of a “peaceful capitalism”. Furthermore, these views were expressed by Kautsky, a man regarded as the Pope of Marxism once upon a time, just at a time when the First World War broke out, in the middle of bloody wars waged for re-dividing colonies.

Ideological struggle against those who spread dreams about “peaceful capitalism” in the middle of hot wars was crucial. Therefore, there is nothing incomprehensible in Lenin’s overemphasis on the question of “colonial conquests” which were the realities of that period. For similar reasons, answers to the burning political questions of the day and the analysis of main tendencies of the imperialist epoch are mingled in Lenin’s Imperialism. However, while stating fundamental characteristics of imperialist stage capitalism has risen with the beginning of 20th century, Lenin drew attention to the most important points. We can emphasize those as; 1) capitalist monopolist associations, 2) fusion of banking and industrial capital, 3) capital exports to foreign countries, 4) that the world has already been divided up, 5) beginning of the division of spheres of influence of the world among international economic trusts.

[1] Lenin, ibid, p.200

[2] Lenin, ibid, p.202

[3] Lenin, ibid, p.226