Library:Imperialism, the highest stage of capitalism/The export of capital
Under the old capitalism, when free competition prevailed, the export of goods was the most typical feature. Under modern capitalism, when monopolies prevail, the export of capital has become the typical feature.
Capitalism is commodity production at the highest stage of development, when labour power itself becomes a commodity. The growth of internal exchange, and particularly of international exchange, is the characteristic distinguishing feature of capitalism. The uneven and spasmodic character of the development of individual enterprises, of individual branches of industry and individual countries, is inevitable under the capitalist system. England became a capitalist country before any other, and in the middle of the nineteenth century, having adopted free trade, claimed to be the “workshop of the world,” the great purveyor of manufactured goods to all countries, which in exchange were to keep her supplied with raw materials. But in the last quarter of the nineteenth century, this monopoly was already undermined. Other countries, protecting themselves by tariff walls, had developed into independent capitalist states. On the threshold of the twentieth century, we see a new type of monopoly coming into existence. Firstly, there are monopolist capitalist combines in all advanced capitalist countries; secondly, a few rich countries, in which the accumulation of capital reaches gigantic proportions, occupy a monopolist position. An enormous “superabundance of capital” has accumulated in the advanced countries.
It goes without saying that if capitalism could develop agriculture, which today lags far behind industry everywhere, if it could raise the standard of living of the masses, who are everywhere still poverty-stricken and underfed, in spite of the amazing advance in technical knowledge, there could be no talk of a superabundance of capital. This “argument” the petty-bourgeois critics of capitalism advance on every occasion. But if capitalism did these things it would not be capitalism; for uneven development and wretched conditions of the masses are fundamental and inevitable conditions and premises of this mode of production. As long as capitalism remains what it is, surplus capital will never be utilized for the purpose of raising the standard of living of the masses in a given country, for this would mean a decline in profits for the capitalists; it will be used for the purpose of increasing those profits by exporting capital abroad to the backward countries. In these backward countries profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap. The possibility of exporting capital is created by the fact that numerous backward countries have been drawn into international capitalist intercourse; main railways have either been built or are being built there; the elementary conditions for industrial development have been created, etc. The necessity for exporting capital arises from the fact that in a few countries capitalism has become “over-ripe” and (owing to the backward state of agriculture and the impoverished state of the masses) capital cannot find “profitable” investment.
Here are approximate figures showing the amount of capital invested abroad by the three principal countries:
| Year | Great Britain | France | Germany |
|---|---|---|---|
| 1862 | 3.6 | — | — |
| 1872 | 15.0 | 10 (1869) | — |
| 1882 | 22.0 | 15 (1880) | ? |
| 1893 | 42.0 | 20 (1890) | ? |
| 1902 | 62.0 | 27–37 | 12.5 |
| 1914 | 75–100 | 60 | 44.0 |
This table shows that the export of capital reached formidable dimensions only in the beginning of the twentieth century. Before the war the capital invested abroad by the three principal countries amounted to between 175,000,000,000 and 200,000,000,000 francs. At the modest rate of 5 per cent, this sum should have brought in from 8 to 10 billions a year. This provided a solid basis for imperialist oppression and the exploitation of most of the countries and nations of the world; a solid basis for the capitalist parasitism of a handful of wealthy states!
How is this capital invested abroad distributed among the various countries? Where does it go? Only an approximate answer can be given to this question, but sufficient to throw light on certain general relations and ties of modern imperialism.
| Continent | Gt. Britain | France | Germany | Total |
|---|---|---|---|---|
| Europe | 4 | 23 | 18 | 45 |
| America | 37 | 4 | 10 | 51 |
| Asia, Africa and
Australia |
29 | 8 | 7 | 44 |
| Total | 70 | 35 | 35 | 140 |
The principal spheres of investment of British capital are the British colonies, which are very large also in America (for example, Canada) not to mention Asia, etc. In this case, enormous exports of capital are bound up with the possession of enormous colonies, of the importance of which for imperialism we shall speak later. In regard to France, the situation is quite different. French capital exports are invested mainly in Europe, particularly in Russia (at least ten billion francs). This is mainly loan capital, in the form of government loans and not investments in industrial undertakings. Unlike British colonial imperialism, French imperialism might be termed usury imperialism. In regard to Germany, we have a third type; the German colonies are inconsiderable, and German capital invested abroad is divided fairly evenly between Europe and America.
The export of capital greatly affects and accelerates the development of capitalism in those countries to which it is exported. While, therefore, the export of capital may tend to a certain extent to arrest development in the countries exporting capital, it can only do so by expanding and deepening the further development of capitalism throughout the world.
The countries which export capital are nearly always able to obtain “advantages,” the character of which throws light on the peculiarities of the epoch of finance capital and monopoly. The following passage, for instance, occurred in the Berlin review, Die Bank, for October 1913:
“A comedy worthy of the pen of Aristophanes is being played just now on the international capital market. Numerous foreign countries, from Spain to the Balkan states, from Russia to the Argentine, Brazil and China, are openly or secretly approaching the big money markets demanding loans, some of which are very urgent. The money market is not at the moment very bright and the political outlook is not yet promising. But not a single money market dares to refuse a foreign loan for fear that its neighbor might first anticipate it and so secure some small reciprocal service. In these international transactions the creditor nearly always manages to get some special advantages: an advantage of a commercial-political nature, a coaling station, a contract to construct a harbor, a fat concession, or an order for guns.”
Finance capital has created the epoch of monopolies, and monopolies introduce everywhere monopolist methods: the utilization of “connections” for profitable transactions takes the place of competition on the open market. The most usual thing is to stipulate that part of the loan that is granted shall be spent on purchases in the country of issue, particularly on orders for war materials, or for ships, etc. In the course of the last two decades (1890–1910), France often resorted to this method. The export of capital abroad thus becomes a means for encouraging the export of commodities. In these circumstances transactions between particularly big firms assume a form “bordering on corruption,” as Schilder “delicately” puts it. Krupp in Germany, Schneider in France, Armstrong in England are instances of firms which have close connections with powerful banks and governments and cannot be “ignored” when arranging a loan.
France granted loans to Russia in 1905 and by the commercial treaty of September 16, 1905, she “squeezed” concessions out of her to run till 1917. She did the same thing when the Franco-Japanese commercial treaty was concluded on August 19, 1911. The tariff war between Austria and Serbia, which lasted with a seven months” interval, from 1906 to 1911, was partly caused by competition between Austria and France for supplying Serbia with war materials. In January 1912, Paul Deschanel stated in the Chamber of Deputies that from 1908 to 1911 French firms had supplied war materials to Serbia to the value of 45,000,000 francs.
A report from the Austro-Hungarian Consul at Sao-Paulo (Brazil) states:
“The construction of the Brazilian railways is being carried out chiefly by French, Belgian, British and German capital. In the financial operations connected with the construction of these railways the countries involved also stipulate for orders for the necessary railway materials.”
Thus, finance capital, almost literally, one might say, spreads its net over all countries of the world. Banks founded in the colonies, or their branches, play an important part in these operations. German imperialists look with envy on the “old” colonising nations which are “well established” in this respect. In 1904, Great Britain had 50 colonial banks with 2,279 branches (in 1910 there were 72 banks with 5,449 branches); France had 20 with 136 branches; Holland 16 with 68 branches; and Germany had a “mere” 13 with 70 branches. The American capitalists, in their turn, are jealous of the English and German: “In South America,” they complained in 1915, “five German banks have forty branches and five English banks have seventy branches. […] England and Germany have invested in Argentina, Brazil, and Uruguay in the last twenty-five years approximately four thousand million dollars, and as a result enjoy together 46 per cent of the total trade of these three countries.”
The capital exporting countries have divided the world among themselves in the figurative sense of the term. But finance capital has also led to the actual division of the world.