In Vladimir Lenin's analysis of imperialism, this economic stage is defined by five basic features; the presence of monopolies which play a decisive role in economic life; the merging of bank capital with industrial capital into finance capital controlled by a financial oligarchy; the export of capital as distinguished from the simple export of commodities; the formation of international monopolist capitalist associations (cartels) and the territorial division of the whole world among the biggest capitalist powers. This expansion to Marx's analysis of capitalist development was one of Lenin's most important theoretical contributions to political economy.
The development of imperialism in the global economy also reinforces a dialectical relationship between core-periphery countries, mainly dependency and subordination of underdeveloped countries to imperialist economies.
Marx posited, according to his three laws of motion, that as capitalist economies matured, they would inevitably be driven into a crisis which would result in internal class revolt and the establishment of a dictatorship of the proletariat (and eventually socialism). However, according to Lenin's observations, the development of imperialism allowed capitalism to postpone this crisis through the acquisition of colonies, which served as a new outlets for capital investment and a new source of labour power to exploit.
This scramble for the expansion of capitalist empires drove the various imperialist powers into a competition with one another over the size of their imperialist spheres of influence and access to resources and labour markets, which led to destructive inter-imperialist conflicts such as the First World War. Imperialism thus stretches the inherent contradictions of capitalism to ever more extreme limits, leading J.V. Stalin to deem Leninism the "Marxism of the era of imperialism".
Imperialism as a stage of development in capitalism means that it will always develop in any sufficiently advanced capitalist mode of production. As markets become saturated within the boundaries of the individual nation (due to an influx of producers), capital must be exported elsewhere, and the main function of banks is to help with that (see finance capitalism).
Countries must eventually turn to imperialism for two main reasons:
- Capitalism requires constant consumption, which translates into constant growth (and GDP growth). Without GDP growth, capitalism stagnates and a recession occurs. However, since it is impossible to expect infinite growth with finite available resources and as markets become saturated, the bourgeoisie must seek new opportunities.
- The bourgeoisie is also in constant internal competition, and as such there is a very rational reason for a capitalist to emerge victorious over the competition; accessing untapped markets and cheaper labour will give them an edge over the competition.
However, imperialized countries will not be allowed to develop past the most primitive stage of capitalism, preventing them from developing their own imperialism. In these countries, we may see the emergence of two distinct subsections of the bourgeoisie. Firstly, a "comprador" class, i.e. the section of the national bourgeoisie which is allied with, and dependent upon, foreign imperialist investment; and second the "national" bourgeoisie, whose class interests are, at least temporarily, aligned with the exploited working class-- to achieve national liberation (so that they can become exploiters without being exploited, upon which point their tentative alignment with the national proletariat will end).
In this way, all semi-barbarian countries, which had hitherto been more or less strangers to historical development, and whose industry had been based on manufacture, were violently forced out of their isolation. They bought the cheaper commodities of the English and allowed their own manufacturing workers to be ruined. Countries which had known no progress for thousands of years – for example, India – were thoroughly revolutionized, and even China is now on the way to a revolution.
We have come to the point where a new machine invented in England deprives millions of Chinese workers of their livelihood within a year’s time.
In this way, big industry has brought all the people of the Earth into contact with each other, has merged all local markets into one world market, has spread civilization and progress everywhere and has thus ensured that whatever happens in civilized countries will have repercussions in all other countries.
— Engels, Principles of communism [note 1]
At the time of his writing, imperialism was not yet a word in common use (not until the 1870s) however, policies of imperialism were already happening around the world -- especially at hands of the British Empire in Africa.
Given that imperialism is, (according to Lenin) the highest stage of capitalism, one tendency of imperialism is to export the class conflict of a nation to foreign lands. Thus, the British nation, in order to solve its problem of unemployment and food scarcity along a capitalist basis (without socialism; redistribution of wealth and power to the commoners through social ownership) it had to find new lands to settle the unemployed.
"In order to save the forty million inhabitants of the United Kingdom from a bloody civil war, our colonial statesmen must acquire new lands for settling the surplus population of this country, to provide new markets. ... The Empire, as I have always said, is a bread and butter question."
Today, imperialism is still very much alive as Lenin described. The International Monetary Fund (IMF) and World Bank for example were institutions created for the benefit of the imperial core (the richest and oldest capitalist economies, grossly encompassing North America and Western Europe) so as to perpetually keep former colonised countries in debt that they can not repay. The IMF is known to demand specific free market policies put into place so as to facilitate movement of capital from the imperial core towards these ex-colonies, also known as the Global South. On top of having many strings attached, the IMF is allowed to seize projects when loans cannot be paid back, and they often can't due to very harsh payment plans (usually very high interest rates over a 7-year period).
This "soft" imperialism is not the only form of imperialism happening, and we can look at the US Invasion of Iraq in 2003 for a "harder" form of imperialism. In this case, the entire country of Iraq as well as the surrounding region was destabilized, which allowed U.S. oil companies to eliminate competition and seize these wells for themselves.
During the Cold War, a rivalry between the world's two global powers at the time (the USA and the Soviet Union), the CIA's Congress for Cultural Freedom cultivated a milieu of anti-Soviet leftists to advance the geopolitical line of the US. One accusation that was waged against the Soviet union was that it was yet another imperialist state, based on the conflicts which happened between the Soviet Union and China. USSR did not practice imperialism in the Leninist sense — it did not export capital and was not under control of a financial oligarchy.
In modern times, some accuse China of being imperialist, mainly in Africa. These people again use the liberal definition of imperialism and can be ignored in much the same way.
With its Belt and Road Initiative, China does not practice the same harsh policies as the IMF (namely, forcing austerity upon loan recipients) and that is why they are being favored by more and more countries, leading to a disinformation campaign by the imperial core to help drive popular support from the B&R and back towards the IMF. Famously, Chinese loans pay for infrastructure (needed for development), are often forgiven , and there are no policies required to getting such a loan.
- Vladimir Lenin. Imperialism, the highest stage of capitalism. "Chapter 1: Concentration of production and monopolies":
“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.”
- Vladimir Lenin. Imperialism, the highest stage of capitalism. "Chapter 7: Imperialism as a special stage of capitalism":
“But very brief definitions, although convenient, for they sum up the main points, are nevertheless inadequate, since we have to deduce from them some especially important features of the phenomenon that has to be defined. And so, without forgetting the conditional and relative value of all definitions in general, which can never embrace all the concatenations of a phenomenon in its full development, we must give a definition of imperialism that will include the following five of its basic features: (1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with industrial capital, and the creation, on the basis of this “finance capital”, of a financial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation of international monopolist capitalist associations which share the world among themselves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.”