by Keith Joseph
I think that capitalism is a perfectly adequate term to describe the international system and I think that Marx’s critique of political economy provides the conceptual apparatus that we need to apprehend the world system. Lenin’s theory doesn’t add anything useful and in fact adds a great deal of confusion. I have made this comment before. Lenin’s theory is usually dogmatically defended (I define “dogma” as assertion without evidence), but here is my critique in a nutshell.
The four main features of Lenin’s theory are:
1. The combination of industrial capital with bank capital, creating a new form of capital called “Finance Capital.”
2.The move from competition among many capitalist concerns to huge transnational monopolies.
3.The move from mere export of products to export of capital; i.e. capital moving all over the globe in search of maximum profits.
4. Competition and wars between rival capitalist powers.
Each is wrong. Let’s take these one at a time:
1. The combination of industrial capital with finance capital.
Lenin gets this idea from the Rudolph Hilferding who elaborated it at great length in his text: “Finance Capital.” The problem is that this is not a theoretical discovery. It is a empirical observation. And Marx’s theory was/is adequate to deal with it. In the second volume of Das Kapital Marx explains that circuit of industrial capital has three moments: money capital, productive capital, and merchant capital. Collectively these three moments make up the circuit of “industrial capital.” In other words, money capital, be it institutionally controlled by a bank or not, is already a part of the circuit of industrial capital. The relationship between productive capital and banks can certainly be one of struggle and banks can dominate productive capitals but so can merchant capitals. Wal-Mart’s domination of productive capitalists – in mainstream literature productive capitals are referred to as wal-marts “suppliers”—is legendary. In any event, the idea that “Finance capital” is a merger of bank and industrial capital is redundant. It freezes a momentary empirical observation into a universal theory and only adds confusion.
Here is a quote from Marx making the point:
“The real circuit of industrial capital in its continuity is therefore not only a unified process of circulation and production, but also a unity of all its three circuits” The three circuits are money, production, circulation. (that is on page185 of volume 2 penguin edition)
What we need is a class analysis of the corporation. “Wall Street” is the colloquial term for financial capital. Investors, i.e., finance capitals, own shares of the corporation and some of those share holders elect a board of directors. The board of directors main jobs are hiring top managers and appropriating and distributing the surplus value pump out of labor. Top management takes on many of the same duties as the capitalist entrepreneur of smaller enterprises, namely overseeing the production process and seeing the commodity to market for the realization of value. All three of these moments, financing, production, selling could be accomplished by one capitalist, usually in a smaller enterprise, or they could be separated: a shoe making enterprise finance itself and markets its products in branded retail shops (For example, I just bought a pair of red wing work boots at a store that only sells red wing work boots. I didnt look that deeply into the companies operations but I assume the retail store is owned by the productive capital). Or the enterprise borrows money from the bank, produces shoes and delivers them to Footlocker (a separate retail store with wares from many different productive capitals) for realization of the value. In any case it is an empirical difference that we grasp with the same theoretical apparatus. In this case the theoretical apparatus developed by Marx. Hilferding and Lenin add nothing here but confusion.
2. the theory of monopoly capitalism
This is Lenin’s most egregious error and, in my view, his most pernicious. Have you ever wondered why so few Marxists read Marx? The theory of monopoly capitalism is the answer.
Everyone familiar Lenin ‘s theory, and the history of the communist movement, knows the following catechism:
Marx studied 19th century competitive capitalism. But in the 20th century a new and higher monopoly stage of capitalism emerged, analyzed by Lenin.
This, of course, renders Marx’s magnum opus Das Kapital and his labor theory of value to the dustbin of academia, and thus Lenin’s short propaganda pamphlet displaces Marx’s critique of political economy (competition between capitals is the mechanism that enforces what Marx called “the law of value” without competition there is no labor theory of value). Why bother reading Marx. The capitalism Marx talks about no longer exists. Or so 20th century communists believed. But they were: WRONG!
But just because it displaces Marx does not make it wrong. Let’s see how Lenin’s theory is wrong.
The theory of monopoly capitalism posits two stages of capitalism: a nineteenth century competitive stage, and a twentieth century monopoly stage. This dichotomy, the very notion of a “competitive stage,” and a “monopoly stage” is incontrovertible evidence that Lenin is working with a different theoretical paradigm then Marx. In other words, Lenin and Marx have very different theories of competition and monopoly. In Lenin monopoly negates competition (if this weren’t the case there would be no need to identify a “new stage”), and thus the law of value is negated. In Marx monopoly intensifies competition.
The idea that there are stages of capitalism with different laws is a radical error. Lenin’s theory is linear. Marx’s is dialectical. In Marx competition leads to monopoly and monopoly leads to competition. The laws of capitalism do not change. There are not new “stages” of capitalism. The application of capitalism’s “laws of motion” first analyzed by Marx are intensified and more perfectly applied over more and more geographic space as capitalism develops. They are not negated as in Lenin’s theory.
Indeed, the world of globalization is not one of monopoly. Quite the opposite, it is one of HYPER-COMPETITION. This is obvious, no?
Global capitalism is the law of value enforced ruthlessly across the face of the entire planet. Everyday more people enter into capitalist social relations. Globalization is capitalism perfecting itself and creating the conditions for its transcendence.
Jonas Zonninsein has a somewhat obscure text entitled “Monopoly Capital Theory” which offers a rigorous critique of Lenin and Hilferding’s theory. I highly recommend it.
3. Export of Capital
The United States, as in “U.S. led imperialism.” is a net importer of capital, not an exporter. Capital is imported and exported regardless of the countries status in the system. Lenin is empirically wrong. Again a momentarily correct empirical observation is transformed into an incorrect theory.
4. Competition between rival capitalist powers
On this point Lenin’s theory has more in common with bourgeois international relations theory than with Marx. And this is the reason why communist analysis is pre-occupied with the nation state and power relations and when it comes to the international arena and has precious little to say about class. We should leave the analysis of power relations to Kissinger.
What we need is a global class analysis.
To just hint at such an analysis: the uprisings in the middle east are uprisings against LANDLORD States. The Gaddaffi regime, for instance, did not tax the Libyan people. The state collected rents on its oil field. The state was a landlord. Indeed, the OPEC countries are all landlord states. Landed Property is a one of the main classes of the capitalist epoch even though it is a feudal class (Marx has a lot to say about landed property in the Eighteenth Brumaire and in the third volume of Capital). The wars in Afghanistan and Iraq are wars of industrial capital against landed property.
There is a collection entitled “The Rentier State in Africa” that develops the idea of the state as owner of landed property collecting rent. Cyrus Bina’s text: “Economics of the Oil Crisis” uses Marx’s theory of rent as do some essays in Peter Norre’s edited volume “Oil and Class Struggle” Also Fernando Coronil’s book “The Magical State” – a study of Venezuela– has a very good analysis of the landlord state in the introduction and first chapter.
Once we grasp that Lenins’ 4 central theses are wrong we realize that the whole theory of imperialism is wrong. We dont need a theory of imperialism. The uselessness of the theory is painstakingly obvious whenever anyone tries to use it to analyze contemporary events (the statement above is a good example). Especially the events it is supposed to explain: wars, global inequality, poverty. We need a theory of capitalism. Because capitalism is war, poverty, inequality, among other things. Do you know the best theory of capitalism? Marx’s value theory elaborated in the three volumes of “Das Kapital” and his “Theories of Surplus Value.”
We need a global class analysis. Our global class analysis must include: financial capital, productive capital, merchant capital, landed property, the working class (stratified across nationally boundaries, by race, by gender, by differential wages and skills, by rates of exploitation etc.)
These are obviously immensely complicated questions. Unfortunately, Lenin’s theory is not a help, it is in the way.
It is time to put away the meager gruel of Lenin’s “Imperialism” pamphlet and get to the feast that is the inheritance of the working class: Marx’s “Das Kapital.” We have good tools, we just have to learn to use them.