Comparison of lenin's and Hobson's theory on imperialism

Anonyme, Monday, October 22, 2007 - 21:29

Dimitri Gallos

Imperialism is a phenomenon that played and still plays an important role in the world economic scene and it reaches to the political, military and social scenes as well. Two of 20th century ’s greatest theorists, V. I Lenin and J. A Hobson have tried to define this phenomenon , explain its causes and its consequences. V. I Lenin went even further than Hobson by proposing a solution for this problem which tends to be a calamity for the world.

In Hobson’s view capitalism leads to a situation where the rich get richer and the poor poorer. So the goods that are produced by the highly productive factories cannot possibly be consumed by either the rich or the poor. It is because the rich are very few in order to consume a large amount of goods compared to the production and the poor simply don’t have the ability to purchase the full extent of the goods simply because they do not have the material means to do so. Consequently this leads to an insolvable problem because there is an excess of goods and an excess of capital. This excess of capital is of course in the hands of the rich which would use it for investing in further production of goods. Since there is no market to consume these goods, production comes to a halt and the capital of the rich becomes useless.

The solution to this problem is of course overseas investment[1]. A large portion of this excess capital is invested abroad by capitalists stationed in countries where there is this excess, in order to utilize their savings and to find new markets for their excess goods. This process leads to a further exploitation of the people of the countries where the capitalists invest. It also leads to a fierce race between the bourgeois of different countries in order to part the world. This fierce race leads to economic rivalry that in turn leads to possible wars between the countries of the different capital owners.

Hobson also noted that this imperial expansion is not happening because of nationalist reasons , but because of the bourgeois oligarchy which controls the government . He saw imperialism as unnecessary and immoral and as a result of misdistribution of wealth. He viewed imperialism as the road to war , leading to the destruction of the world.

Lenin, being inspired by Hobson’s work wrote “Imperialism : the Highest Stage of Capitalism" where he not only analyzed the causes and the consequences of imperialism , he also predicted the coming of the second world war .He also proposed a realistic program of struggle which would bring an end to this calamity. The program of struggle of Lenin and the lack thereof in Hobson’s interpretation is one of the main differences in their theories. Hobson avoids class favoritism and fails to realize that capitalism and imperialism cannot exist without one another , or at least he fails to realize that if imperialism and capitalism did not co-exist there would be social unrest that would have lead to economic, social and political changes within the capitalist countries.

[1] A good example in our present society of present overseas investment is the situation in India and China , where giant multinationals take advantage of the workers and the governments inability to serve their own people and produce in low cost a variety of products. If those products were not produced in countries where the cost is low, the class struggle in the advanced capitalist countries would have been much more fierce, due to the capitalist class of said countries having less money to buy class peace. This shows us however that capitalism cannot survive without imperialism and without the relationship master - slave.

Lenin argued that it is necessary for capitalism to induce monopoly capitalism which he called imperialism, in order to find new markets and resources. He called imperialism the highest stage of capitalism. He argued that it is necessary for capitalist nations to expand in order for the economic system to survive. Like Hobson, Lenin saw imperialism not necessarily as a political-military domination and expansion of one country but more as the economic exploitation and control of the weaker third world countries ,by the strong and industrialized developed countries. He identified some features that make us able to recognize imperialism as a stage of capitalist development.

Firstly , it is the concentration of the means of production, production itself, capital and the creation of giant multinational or national corporations which control various sectors of one country’s economy, thus creating a monopoly. The term monopoly is not understood here as it is understood in neo-liberal or liberal economics. It does not mean that free competition which is the distinct feature of a capitalist economy ceases to exist, but rather the domination of one corporation over a market where antagonism becomes extremely difficult [2]. Consequently it is not an official dissolution of free trade but rather a reality which gives a great blow on capitalism and its theory of free trade. Lenin realized that industries transform to larger scale industries which in turn transform to larger scale industries and force small or medium scale industries to close. This continuation of industry growth creates monopolies which do not eliminate competition but exist above it thus creating a lot of economic problems and intense antagonisms and conflicts. According to Lenin “Monopoly is the transition from capitalism to a higher system."

Secondly the industrial capital is replaced by finance capital through financial institutions such as banks. Therefore we have a concentration of capital in the hands of bankers. Also this capital through loans and deposits becomes active capital in contrast with the inactive industrial capital. That also makes the export of capital more common than that of the export of goods although the latter does not cease to exist. This makes foreign investment a lot easier and clears the path for imperialism. Also following the trend of industries, banks become monopolies as well, so small banks and financial institutions are taken over by bigger banks, thus concentrating the capital into fewer hands. This makes large scaled investment controlled by an elite of bankers.

[2] It is a lot easier to understand this concept of a monopoly in the frame of “free trade" if we identify an example in our present capitalist system , where giant multinational corporations such as Wall- Mart or McDonalds have managed to dominate or control a big proportion of their markets which has and will have a lot of consequences to the small and medium businesses of their sector.

Thirdly there is the economic and political division of the world by the dominant countries. The imperialist countries either race in order to acquire the most colonies or the most spheres of influence and that race results in fierce diplomatic and/or military antagonisms that eventually would lead to war, or they simply agree upon these spheres of influence previous to the colonization[3] in order o make the colonization - exploitation easier for them and without clashes, but that is rarely the case. Off course all this economic and political division and all this race between the imperialists translates into a harsher life for the people in the “colonies". The imperialists compete with each other in harshness and brutality in order to ensure more resources, more production and thus higher profits and the only victims of this situation are the oppressed people of the colonies.

Apart from that Lenin proposes a program of struggle against imperialism. He urges the people of the imperialist countries not to take part into imperialist wars. He criticizes the European “socialists“ about their position on the battle of the slave owners for the partition of the world( world war 1). He argues that the war is not happening for patriotic reasons (which was the case when the Germans invaded the Soviet Union in 1941, at least on the part of the Red Army) but it is clearly a war between the bourgeois of the different super powers and their satellites. He argues that only socialism can bring an end to imperialism because socialism is the only ideology that does not rely on economic exploitation for its viability because the problems of inequality , misdistribution of wealth and greed are solved from the beginning, even from the dictatorship of the proletariat.

In spite of the prediction of world war two Lenin also predicted that capitalism will destroy itself when it passes through the stage of imperialism. Indeed that was the case in world war two. At least in Europe capitalism as it was before, got destroyed giving place to socialist Eastern European countries and pseudo-social democrat Western European countries. At least in Europe liberalism suffered a great blow and ceased to exist, coming back as neo-liberal policies come into place since the fall of the Soviet Union. Hobson too in his work, argued that imperialism will lead to the destruction of the world. Lenin partially agrees but his argument is that it is not the world that will be destroyed, but capitalism as it was mentioned before.

[3] A good example of a race in order to acquire the most colonies was during the colonization of Africa between Britain, Spain, Portugal, France and Germany. That fierce race was one of the reasons why World War 1 started. A good example of a situation where imperialist countries agree upon spheres of influence is when J. Stalin met with the British imperialist Churchill and the American imperialist , president Roosevelt at the Yalta Conference in order to “cut" the world in half, without having to fight in order to create spheres of influence.

In conclusion, both theorists view capitalism as unnecessary and immoral, but Hobson fails to propose a solution to it. Also Hobson being a non - Marxist avoids to be favorable to one class and does not realize that capitalism and imperialism are strongly inter-connected . Lenin’s main points in identifying imperialism are the concentration of wealth, the creation of finance capital and the export thereof and the partition of the world by the world powers. Hobson’s main points are the misdistribution of wealth in a capitalist country and the need to export the surplus in order to make the industrial excess capital active. Both theorists identify imperialism as territorial and/or economic. The writing of Hobson inspired Lenin and the writing of Lenin is one of the cornerstones of the Marxist- Leninist school of thought, so both are important.

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