From Colonialism to Imperialism

Controversial Issues on National Question

Elif Çağlı

August 2002

Imperialism and importance of capital export

Lenin drew attention to the fact that capital exports were gradually increasing their importance, in order to distinguish imperialist epoch of capitalism from the free competition period: “Typical of the old capitalism, when free competition held undivided sway, was the export of goods. Typical of the latest stage of capitalism, when monopolies rule, is the export of capital.”[1]

Indeed, the shift in the content of the export from developed capitalist countries to underdeveloped regions and colonies in Lenin’s period was very striking. It was inevitable that this new capitalist stage –which would become evident with the export of capital– would transform the colonialist relations of the former period. It is possible for the capital to squeeze more profits in backward countries compared to the developed capitalist countries. Wages, cost of raw materials and rent are lower in backward countries. But in order to realize capital flow into these countries, a substructure has to be founded which will make industrial investments possible in colonial and semi-colonial countries. It is simply because the goal of capital exporters is not getting rid of their “surplus capital”, but rather finding out the most profitable areas for investment, turning this potential expectation into a reality.

A preliminary preparation period of that kind was experienced as early as the last quarter of 19th century especially in colonies and semi-colonies of Asia. First of all, a transportation network was created to link these colonies and semi colonies to the world market. These countries were covered with railways thanks to the exported capital from developed capitalist counties. That was not all, of course. Economic relations based on industrial export of goods from colonialist countries to their colonies and import of cheap raw materials in return from them, gradually changed and deepened. Since, it is not possible in the imperialist stage for developed industrial countries to be content with one dimensional relationships peculiar to the colonialist period. By 20th century, as exported capital accelerated the capitalist development in backward countries, these former colonial countries gradually became more favourable for integration to capitalist market.

When the huge dimensions of extended capitalist reproduction process is compared with the former periods, it is not hard to see why imperialist forces feel a passionate need to extend the area of modern capitalist production. Long time ago, based on the Indian case which was colonized by English empire Marx said that capitalist development in colonies was indispensable. In the colonialist period, major capitalist countries destroyed patriarchal manufacture industries in these countries and made them dependent on their manufactured goods, whereas in the imperialist period, they had to export some “industrialization” to some extent to the colonial countries. For new areas to join capitalist world market, simple commercial relations of the former period would by no means be sufficient any more.

Imperialist period brought about a kind of capitalist development in the colonies and semi-colonies, which proceeded on the basis of unequal interests and determined by the needs of major capitalist states. Even if they could not catch up with the developed capitalist countries, colonies and semi-colonies of the former period took a long way compared to their level of development in the colonialist period. Regions and countries where capital exports were concentrated did not go back compared to the former period. On the contrary, most of the old colonial countries which finance capital did not see as profitable and therefore did not invest in remained behind others. It is obvious that these explanations do not suit the interests of so-called anti-imperialist “national capitalism (!)” supporters who regard imperialism as insidious policies of developed countries aimed to “retard” backward countries. But this is the reality. Combined and uneven development! Thus, within the accelerating tempo of development in capitalist relations, old colonial countries -especially the ones which have important and rich sources like India- begun to be integrated into capitalist system in time. Most of African countries have gone through this process very lately; especially after the Second World War it became more evident.

Imperialism exposed itself in its full essence particularly after the Second World War in 20th century, though all clues were given in the analysis of Marx in Capital and were subject to the assessments of revolutionaries like Lenin in the following periods. Capital export is an inseparable part of imperialism today as it was in the beginning of 20th century, though of course on a much more gigantic scale. Since, huge capital accumulation, emerging as a result of the tendency of concentration and centralization in developed capitalist countries, reveals itself in a burning “surplus capital”. This “surplus capital” has to pass through national borders and be exported in order to find out a profitable area for investment. Main factor in its emergence is not exhaustion of possibilities of investment on a national scale, nor a saturation of domestic market to all kinds of goods. We know that the ambition of capitalists is not to satisfy the needs of the masses. The sole factor motivating capital is the desire of obtaining a higher profit rate. On this basis, capital tends to flow out to areas or countries which seem more profitable. Therefore the most distinctive feature of imperialism is the movement of a huge amount of capital among developed capitalist countries or from developed to semi or underdeveloped ones –or to some extent the reverse.

[1] Lenin, ibid, p.240