The concept of colonial country refers to countries lacking political independence and directly depended on metropolitan country in political-legal terms. Metropolitan country has the complete right of sovereignty and the colonial country is absolutely dependent in politics, economy, diplomacy, military affairs, etc. And the concept semi-colony is only meaningful in comparison with the colonial status. It describes the countries which are in the middle of the road to being colonized, nearly at the point of losing political independence (for example, countries like Turkey, Iran, China at the beginning of 20th century).
But we know that in the imperialist epoch finance capital managed to take even independent countries economically under its yoke. However, in the period when Lenin made his analyses, finance capital could find the biggest “comfort” in the lack of political independence of these countries. Therefore while the First World War was still on, Lenin was right in drawing attention to this matter:
In this respect, the semi-colonial countries provide a typical example of the "middle stage". It is natural that the struggle for these semi-dependent countries should have become particularly bitter in the epoch of finance capital, when the rest of the world has already been divided up.
During the first imperialist division war, the struggle for capturing these semi-dependent countries became sharpened as Lenin mentioned. But the same period also witnessed a rise in national liberation struggles and the proletarian October revolution. In short, the course of events was not in complete accordance with the rivalry among imperialists or their plans. Imperialists were compelled to reconsider their plans at a time when Tsarist Russia collapsed, a workers’ government was founded and this government extended its hand to the oppressed nations and national liberation struggles. Imperialist forces were terrified to observe that a struggle begun as a national liberation struggle turned into a social liberation struggle under the inspiration of victorious Soviet proletariat. From then on a change in colonial countries within the confines of gaining political independence would be seen as lesser evil. In the following years decolonization tendency that already existed in the own nature of imperialist development provoked colonial countries to gain their political independence and take their places among other nation states.
It is not an absolute necessity for imperialist powers to colonise weaker countries for them to have a free hand in pursuing their economic, political, military interests across the world. As a matter of fact, Lenin did not consider the need for re-division of the world on the basis of monopolies’ cutthroat competition solely in the sphere of colonization. In Lenin’s analysis, the important aspect was his emphasis on finance capital’s octopus arms having a grip on even politically independent countries:
Capitalism has developed concentration to such a degree that entire branches of industry have been controlled by syndicates, trusts and associations of capitalist multi-millionaires, and almost the entire globe has been divided up among the “lords of capital” either in the form of colonies, or by entangling other countries in thousands of threads of financial exploitation..
By the end of the First World War, main tendency of imperialist epoch began to expose itself more evidently. Countries politically independent, but economically and diplomatically dependent on imperialist countries were increasing in number. Lenin himself also pointed out this tendency of imperialist epoch. For instance, while he was telling about various forms of dependency, he mentioned financially and diplomatically dependent countries apart from colonial and semi colonial countries:
Since we are speaking of colonial policy in the epoch of capitalist imperialism, it must be observed that finance capital and its foreign policy, which is the struggle of the great powers for the economic and political division of the world, give rise to a number of transitional forms of state dependence. Not only are the two main groups of countries, those owning colonies, and the colonies themselves, but also the diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence, typical of this epoch. We have already referred to one form of dependence — the semi-colony. An example of another is provided by Argentina.
Two concrete examples Lenin dealt with within this context are Argentina and Portugal. Both of these countries were politically independent, but financially dependent on England. In this case, there is no material basis to talk about a colonial status anymore. If they are still likened to a colony, this would be a groundless analogy. Finance capital is already the modern prince able to subjugate even politically independent countries, intervene in their interior affairs, secure its own oligarchic interests through various diplomatic and military impositions. The Portugal example Lenin gave in his book Imperialism, indicates that he did not only consider colonial type of dependence, but more importantly the imperialist type of dependence which would mark the 20th century:
Portugal is an independent sovereign state, but actually, for more than two hundred years, since the war of the Spanish Succession (1701-14), it has been a British protectorate. Great Britain has protected Portugal and her colonies in order to fortify her own positions in the fight against her rivals, Spain and France. In return Great Britain has received commercial privileges, preferential conditions for importing goods and especially capital into Portugal and the Portuguese colonies, the right to use the ports and islands of Portugal, her telegraph cables, etc., etc. Relations of this kind have always existed between big and little states, but in the epoch of capitalist imperialism they become a general system, they form part of the sum total of "divide the world" relations and become links in the chain of operations of world finance capital.
The tendency to colonize can in no way be a general rule in the imperialist epoch. Sometimes it can be more profitable for imperialists to recognise political independence of small nations. As a matter of fact Lenin drew attention to this fact. Intelligent leaders of imperialism think that it is a “more reliable and profitable choice to create politically independent states” for subjugating small nations. But the same leaders also emphasize plainly that: “‘We’ will of course do our best for their financial dependence!” Besides the fact that the distinction between these two became much more easily comprehensible in the following years, Lenin was farsighted enough to try to explain this difference between colonialism and imperialism. He says “economic ‘annexation’ is fully ‘achievable’ without political annexation and is widely practised.” He explains the mechanism it is based on:
The American trusts are the supreme expression of the economics of imperialism or monopoly capitalism. They do not confine themselves to economic means of eliminating rivals, but constantly resort to political, even criminal, methods. It would be the greatest mistake, however, to believe that the trusts cannot establish their monopoly by purely economic methods. Reality provides ample proof that this is “achievable”: the trusts undermine their rivals' credit through the banks (the owners of the trusts become the owners of the banks: buying up shares); their supply of materials (the owners of the trusts become the owners of the railways: buying up shares); for a certain time the trusts sell below cost, spending millions on this in order to ruin a competitor and then buy up his enterprises, his sources of raw materials (mines, land, etc.)..
Afterwards Lenin says, “There you have a purely economic analysis of the power of the trusts and their expansion.” These statements are also an answer to those who try to describe imperialism with false concepts like “neo-colonialism”. Those who define a system in which imperialist powers dictate their political terms and military plans to weak countries thanks to their economic power as “a kind of colonialism” blur the question to say the least, if they are not ill-intentioned. To address the question on the basis of “colonialism” is still to regard the dependency of weak nation states on powerful ones as a question of “national independence”. Yet, most of the former colonial countries have gained their political independence, which laid bare the fact that the essential dependence is the economic one. And this is just what world capitalist system is; there can be no isolated capitalist country without economic dependence on the system.
Therefore, there is no scientific ground in equating this economic dependency of imperialist epoch and political dependency of the colonialist period. Gaining political independence is not in conflict with the operation of capitalist system. On the contrary, powerful capitalist countries make all these politically independent countries dependent on themselves through every kind of economic mechanisms. This dependence, however, is an inter-dependence on unequal terms which is inherent in the operation of capitalist system as a whole. Under capitalism it is impossible to escape from this dependence. And what is more important, it is utterly false to assert that less or medium developed capitalist countries must struggle for national liberation as the colonies and the semi-colonies did once upon a time by asserting economic dependence as an excuse.