Heldira

Larashati | EAC Kyoto University [Geopolitical Economy Of Development Term Assignment] 1

Impression Paper
Imperialism, the Highest State of Capitalism
by Vladimir Lenin, 1917

Capitalism has been an appealing topic when it comes to discussion about global
economic as well as business history. As this concept is perceived very broadly with
such kinds of different interpretation, but the key idea of capital accumulation is still
being reinforced until present time. This book by Vladimir Lenin tries to uncover how
the heightened level of capital accumulation activities constructed the concept of
new imperialism. Written systematically and kept the scope of each chapter within
the range of topic discussion, this book is painless to follow, albeit for beginner
reader. In addition, recognizing this book was written in 1917- remarkably 100 years
ago, most of his criticisms (or, I might say it as forecast) are surprisingly still relevant
to present condition.

It might be quite hard to separate Lenin's strong 'political persona' as a strong
communist leader while reading through the chapters. However, compared to David
Harvey's "Enigma of Capital", this book talks in more gentle approach except on how
it strongly against the idea of imperialism by Karl Kautsky in 1914 that I will discuss in
later paragraph.

While influence of Marx's philosophical thinking can be strongly felt in the entire
book, Lenin pointed some interesting arguments in regards of critics towards
capitalists. Starting from Chapter 1, he unwrapped striking points that further will be
discussed in following chapters with interesting points such as his reading on
compilation on the history of the "formation of monopolies" as quoted, "the
depression (crisis) was no longer regarded as something to be taken for granted; it
was regarded as nothing more than a pause before another boom." (page 38)
Further, Lenin argued that somehow crisis is being utilized as opportunity for
capitalists to develop their strategy and concentrate their power in the form of
cartelization. It became the foundation of economic life and that all became what so
called imperialism.

Apart from huge difference time frame between present time and the time this book
was written book, it is better to see crisis as opportunity to start all over again that
gave more opportunities to new players of the industry (discussed by David Harvey
in Enigma of Capital)1. It is acceptable to argue extremely strong capitalists who tried
to keep their wealth contributed to crises. However, I would argue at the same time,
crises facilitate new transactions opportunity and triggered creativity through
creation of small scale - family business. Taking example of India's giant Aditya Birla
Conglomeration that was rapidly expanded in 1857 - at the crucial period of Indian
Revolt against British administration.2

1
Harvey, David. The enigma of capital: and the crises of capitalism. Profile Books, 2011
2
Birla, Aditya. Heritage Aditya Birla Group, unknown. Web. 21 Jun. 2017.
In the second chapter, Lenin presents how banks (particularly German Banks)
transformed from their modest role as facilitator for capital saving or treasury
activities to capital-generating activities during 20th century. At that point, bank
became very influential to industrial capitalists by supporting data of firms' economic
position as well as generating relationship with government (page 53). Thereupon, it
marks the transformation of old capitalism into the new one. It is very interesting to
see how the phenomena sporadically spread and still happening until present time -
thanks to Adam Smith's division of labor that successfully helped to revolutionize
banks into nowadays-modern commercial banks.

However, one of the facts that are presented is contradictory to Lenin's own premise
that at that time banks became a 'best friend' of industrial capitalists. A case of The
Union Mining Company (TUMC) that comes in Chapter Three about how banks got
big chunks of profit through "reconstruction" of the books in order to prevent bigger
lose of TUMC's shareholder. This somehow left critical gap between legitimizations
of his arguments on the book.

Series of export capital activities and figures are comprehensively covered in Chapter
Four with the main idea is to show the typical later stage when monopolies rule,
which he pointed as export of capital. He put much attention to example of British
colony that transferred their surplus capital (as well as population and production) to
America or France imperialism toward part of Russia (page 70). It may be relatable if
he also put example of the so-called first multinational company in the world,
Dutch's Vereenigde Oost-Indische Compagnie (VOC). The existence of VOC far before
20th century and their aggressive trading and investment activities are undeniably
fact of imperialism as well as capitalism (or probably better to write as
mercantilism)3 had been conducted that far.

Capitalist associations, or as in the book tend to be referred as cartels is heavily
criticized in Chapter Five. Lenin shows how cartels formed at that time and were
backed by strong banks due to 1900s crisis (page 75). Cartelization later developed
into higher stage at state level, or written as "trust"; when German and US divide the
world electric market between themselves (page 77). Similar kind of story also
happened to oil industry. Lenin reveal how fragile is that system since they did not
preclude re-division if uneven development, war, or bankruptcy happens. This later
happened to German Deutsche Bank with American Trust and that he called as
"comedy of oil".

Lenin also frequently pointed out the bourgeois scholars or writers who preferred to
polish those capitalists bad deeds instead of criticizing them. Frankly I could not find
relation of this point to the whole story of the book, yet that kind of exposure is
worth to consider. Particularly, in conjunction with one of main purposes of this
book: which would like to challenge Karl Kautsky's idea of imperialism and theory of

3
Irwin, Douglas A. "Mercantilism as strategic trade policy: the Anglo-Dutch rivalry for the
East India trade." Journal of Political economy 99.6 (1991): 1296-1314.

 Heldira Larashati | EAC Kyoto University [Geopolitical Economy Of Development Term Assignment] 3

ultra-imperialism. Kautsky argued in 1914 as follows: "Imperialism is a product of
highly developed industrial capitalism. It consists in the striving of every industrial
capitalist nation to bring under its control or to annex all large areas of agrarian
territory, irrespective of what nations inhabit it" I would agree to Lenin's strong
opposition towards this idea, as it clearly supports annexation that is imposed by
imperialists. In addition, Lenin regarded Kautsky as "defenders of opportunism
leader" that will surely leave the reader certain kind of impression.

Summary of the chapters are importantly showed in Chapter Seven. Lenin concludes
the chapter by emphasizing that imperialism emerged when capitalist activities are
continuously conducted. However, it will only become imperialist at very high stage
of development and being monopolist (page 91 and 92). Following that, he provided
future recommendation to see imperialism aside from economic conception, such as
from historical point of view of how it connected to capitalism or its relation to
working-class movement.

In conjunction with present time, Vladimir Lenin, was surely ahead of his time.
Proved by numerous explanations that are still closely accountable to present
condition and draw a big picture of how past imperialism contributed to present's
globalization; that the employment of the word itself began only decades after.
However, taking about present condition, I would prefer exploring the connection of
capitalism with liberalism or neoliberalism (which are actually also outdated) rather
than imperialism, even though the presence of imperialism can still be felt in the
existing systems.

Overall, this book provides new alternatives in seeing phenomena of capitalism
through the wider perspective that surely can be taken into consideration for the
development of future economic system or reconstruction of existing structure in
delightful way.