8. Parasitism & Decay of Capitalism
We now have to examine yet another significant aspect of imperialism to which most of the discussions on the subject usually attach insufficient importance. One of the shortcomings of the Marxist Hilferding is that on this point he has taken a step backward compared with the non-Marxist Hobson. I refer to parasitism, which is characteristic of imperialism.
As we have seen, the deepest economic foundation of imperialism is monopoly. This is capitalist monopoly, i.e., monopoly which has grown out of capitalism and which exists in the general environment of capitalism, commodity production and competition, in permanent and insoluble contradiction to this general environment. Nevertheless, like all monopoly, it inevitably engenders a tendency of stagnation and decay. Since monopoly prices are established, even temporarily, the motive cause of technical and, consequently, of all other progress disappears to a certain extent and, further, the economic possibility arises of deliberately retarding technical progress. For instance, in America, a certain Owens invented a machine which revolutionised the manufacture of bottles. The German bottle-manufacturing cartel purchased Owens’s patent, but pigeonholed it, refrained from utilising it. Certainly, monopoly under capitalism can never completely, and for a very long period of time, eliminate competition in the world market (and this, by the by, is one of the reasons why the theory of ultra-imperialism is so absurd). Certainly, the possibility of reducing the cost of production and increasing profits by introducing technical improvements operates in the direction of change. But the tendency to stagnation and decay, which is characteristic of monopoly, continues to operate, and in some branches of industry, in some countries, for certain periods of time, it gains the upper hand.
The monopoly ownership of very extensive, rich or well-situated colonies operates in the same direction.
Further, imperialism is an immense accumulation of money capital in a few countries, amounting, as we have seen, to 100,000-150,000 million francs in securities. Hence the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by ‘clipping coupons’, who take no part in any enterprise whatever, whose profession is idleness. The export of capital, one of the most essential economic bases of imperialism, still more completely isolates the rentiers from production and sets the seal of parasitism on the whole country that lives by exploiting the labour of several overseas countries and colonies.
“In 1893,” writes Hobson, “the British capital invested abroad represented about 15 per cent of the total wealth of the United Kingdom.” (J.A. Hobson, op. cit., pp. 59, 62.) Let me remind the reader that by 1915 this capital had increased about two and a half times. Hobson says further on:
Aggressive imperialism, which costs the tax-payer so dear, which is of so little value to the manufacturer and trader… is a source of great gain to the investor… The annual income Great Britain derives from commissions in her whole foreign and colonial trade, import and export, is estimated by Sir R. Giffen at £18,000,000 [nearly 170 million rubles] for 1899, taken at 2.5 per cent, upon a turnover of £800,000,000.
Great as this sum is, it cannot explain the aggressive imperialism of Great Britain, which is explained by the income of £90 million to £100 million from ‘invested’ capital, the income of the rentiers.
The income of the rentiers is five times greater than the income obtained from the foreign trade of the biggest ‘trading’ country in the world! This is the essence of imperialism and imperialist parasitism.
For that reason, the term ‘rentier state’ (Rentnerstaat), or usurer state, is coming into common use in the economic literature that deals with imperialism. The world has become divided into a handful of usurer states and a vast majority of debtor states. Schulze-Gaevernitz says:
At the top of the list of foreign investments are those placed in politically dependent or allied countries: Great Britain grants loans to Egypt, Japan, China and South America. Her navy plays here the part of bailiff in case of necessity. Great Britain’s political power protects her from the indignation of her debtors. (G. Schulze-Gaevernitz, Britischer Imperialismus, p. 320 et seq.)
Sartorius von Waltershausen in his book, The National Economic System of Capital Investments Abroad, cites Holland as the model ‘rentier state’ and points out that Great Britain and France are now becoming such. (S. von Waltershausen, Das volkswirtschaftliche System, etc., Berlin, 1907, Buch IV.) Schilder is of the opinion that five industrial states have become “definitely pronounced creditor countries”: Great Britain, France, Germany, Belgium and Switzerland. He does not include Holland in this list simply because she is “industrially little developed”. (Schilder, op. cit., p. 393.) The United States is a creditor only of the American countries.
Schulze-Gaevernitz writes that:
Great Britain is gradually becoming transformed from an industrial into a creditor state. Notwithstanding the absolute increase in industrial output and the export of manufactured goods, there is an increase in the relative importance of income from interest and dividends, issues of securities, commissions and speculation in the whole of the national economy. In my opinion it is precisely this that forms the economic basis of imperialist ascendancy. The creditor is more firmly attached to the debtor than the seller is to the buyer. (G. Schulze-Gaevernitz, op. cit., p. 122.)
In regard to Germany, A. Lansburgh, the publisher of the Berlin Die Bank, in 1911, in an article entitled ‘Germany – a Rentier State’, wrote the following:
People in Germany are ready to sneer at the yearning to become rentiers that is observed in France. But they forget that as far as the bourgeoisie is concerned the situation in Germany is becoming more and more like that in France. (Die Bank, 1911, 1, pp. 10-11.)
The rentier state is a state of parasitic, decaying capitalism, and this circumstance cannot fail to influence all the socio-political conditions of the countries concerned, in general, and the two fundamental trends in the working-class movement, in particular. To demonstrate this in the clearest possible manner let me quote Hobson, who is a most reliable witness, since he cannot be suspected of leaning towards Marxist orthodoxy; on the other hand, he is an Englishman who is very well acquainted with the situation in the country which is richest in colonies, in finance capital, and in imperialist experience.
With the Anglo-Boer War fresh in his mind, Hobson describes the connection between imperialism and the interests of the ‘financiers’, their growing profits from contracts, supplies, etc., and writes:
While the directors of this definitely parasitic policy are capitalists, the same motives appeal to special classes of the workers. In many towns, most important trades are dependent upon government employment or contracts; the imperialism of the metal and shipbuilding centres is attributable in no small degree to this fact.
Two sets of circumstances, in this writer’s opinion, have weakened the old empires: (1) “economic parasitism”, and (2) the formation of armies recruited from subject peoples.
There is first the habit of economic parasitism, by which the ruling state has used its provinces, colonies, and dependencies in order to enrich its ruling class and to bribe its lower classes into acquiescence.
And I shall add that the economic possibility of such bribery, whatever its form may be, requires high monopolist profits.
As for the second circumstance, Hobson writes:
One of the strangest symptoms of the blindness of imperialism is the reckless indifference with which Great Britain, France and other imperial nations are embarking on this perilous dependence. Great Britain has gone farthest. Most of the fighting by which we have won our Indian Empire has been done by natives; in India, as more recently in Egypt, great standing armies are placed under British commanders; almost all the fighting associated with our African dominions, except in the southern part, has been done for us by natives.
Hobson gives the following economic appraisal of the prospect of the partitioning of China:
The greater part of Western Europe might then assume the appearance and character already exhibited by tracts of country in the South of England, in the Riviera and in the tourist-ridden or residential parts of Italy and Switzerland, little clusters of wealthy aristocrats drawing dividends and pensions from the Far East, with a somewhat larger group of professional retainers and tradesmen and a larger body of personal servants and workers in the transport trade and in the final stages of production of the more perishable goods; all the main arterial industries would have disappeared, the staple foods and manufactures flowing in as tribute from Asia and Africa… We have foreshadowed the possibility of even a larger alliance of Western states, a European federation of great powers which, so far from forwarding the cause of world civilisation, might introduce the gigantic peril of a Western parasitism, a group of advanced industrial nations, whose upper classes drew vast tribute from Asia and Africa, with which they supported great tame masses of retainers, no longer engaged in the staple industries of agriculture and manufacture, but kept in the performance of personal or minor industrial services under the control of a new financial aristocracy. Let those who would scout such a theory (it would be better to say: prospect) as undeserving of consideration examine the economic and social condition of districts in Southern England today which are already reduced to this condition, and reflect upon the vast extension of such a system which might be rendered feasible by the subjection of China to the economic control of similar groups of financiers, investors, and political and business officials, draining the greatest potential reservoir of profit the world has ever known, in order to consume it in Europe. The situation is far too complex, the play of world forces far too incalculable, to render this or any other single interpretation of the future very probable; but the influences which govern the imperialism of Western Europe today are moving in this direction, and, unless counteracted or diverted, make towards some such consummation. (J.A. Hobson, op. cit., pp. 103, 205, 144, 335, 386.)
The author is quite right: if the forces of imperialism had not been counteracted they would have led precisely to what he has described. The significance of a ‘United States of Europe’ in the present imperialist situation is correctly appraised. He should have added, however, that, also within the working-class movement, the opportunists, who are for the moment victorious in most countries, are ‘working’ systematically and undeviatingly in this very direction. Imperialism, which means the partitioning of the world, and the exploitation of other countries besides China, which means high monopoly profits for a handful of very rich countries, makes it economically possible to bribe the upper strata of the proletariat, and thereby fosters, gives shape to, and strengthens opportunism. We must not, however, lose sight of the forces which counteract imperialism in general, and opportunism in particular, and which, naturally, the social-liberal Hobson is unable to perceive.
The German opportunist, Gerhard Hildebrand, who was once expelled from the Party for defending imperialism, and who could today be a leader of the so-called ‘Social-Democratic’ Party of Germany, supplements Hobson well by his advocacy of a “United States of Western Europe” (without Russia) for the purpose of “joint” action – against the African Negroes, against the “great Islamic movement”, for the maintenance of a “powerful army and navy”, against a “Sino-Japanese coalition”, etc. (G. Hildebrand, Die Erschütterung der Industrieherrschaft und des Industriesozialismus, 1910, p. 229 et seq.)
The description of “British imperialism” in Schulze-Gaevernitz’s book reveals the same parasitical traits. The national income of Great Britain approximately doubled from 1865 to 1898, while the income “from abroad” increased ninefold in the same period. While the “merit” of imperialism is that it “trains the Negro to habits of industry” (you cannot manage without coercion), the “danger” of imperialism lies in that:
Europe will shift the burden of physical toil – first agricultural and mining, then the rougher work in industry – on to the coloured races, and itself be content with the role of rentier, and in this way, perhaps, pave the way for the economic, and later, the political emancipation of the coloured races.
An increasing proportion of land in England is being taken out of cultivation and used for sport, for the diversion of the rich. As far as Scotland – the most aristocratic place for hunting and other sports – is concerned, it is said that ‘it lives on its past and on Mr. Carnegie’ (the American multimillionaire). On horse racing and fox hunting alone, England annually spends £14,000,000 (nearly 130 million rubles). The number of rentiers in England is about one million. The percentage of the productively employed population to the total population is declining. (As shown in table 8.1.)
(8.1) Percentage Productively Employed as Proportion of Population in England and Wales
Population England and Wales (000,000)
Workers in basic industries (000,000)
Percent of total population
And in speaking of the British working class the bourgeois student of “British imperialism at the beginning of the twentieth century” is obliged to distinguish systematically between the “upper stratum” of the workers and the “lower stratum of the proletariat proper”. The upper stratum furnishes the bulk of the membership of co-operatives, of trade unions, of sporting clubs and of numerous religious sects. To this level is adapted the electoral system, which in Great Britain is still “sufficiently restricted to exclude the lower stratum of the proletariat proper”! In order to present the condition of the British working class in a rosy light, only this upper stratum – which constitutes a minority of the proletariat – is usually spoken of. For instance, “the problem of unemployment is mainly a London problem and that of the lower proletarian stratum, to which the politicians attach little importance…” (G. Schulze-Gaevernitz, Britischer Imperialismus, p. 301.) He should have said: to which the bourgeois politicians and the ‘socialist’ opportunists attach little importance.
One of the special features of imperialism connected with the facts I am describing, is the decline in emigration from imperialist countries and the increase in immigration into these countries from the more backward countries where lower wages are paid. As Hobson observes, emigration from Great Britain has been declining since 1884. In that year the number of emigrants was 242,000, while in 1900, the number was 169,000. Emigration from Germany reached the highest point between 1881 and 1890, with a total of 1,453,000 emigrants. In the course of the following two decades, it fell to 544,000 and to 341,000. On the other hand, there was an increase in the number of workers entering Germany from Austria, Italy, Russia and other countries. According to the 1907 census, there were 1,342,294 foreigners in Germany, of whom 440,800 were industrial workers and 257,329 agricultural workers. (Statistik des Deutschen Reichs, Bd. 211.) In France, the workers employed in the mining industry are, “in great part”, foreigners: Poles, Italians and Spaniards. (H. Henger, Die Kapitalsanlage der Franzosen, Stuttgart, 1913.) In the United States, immigrants from Eastern and Southern Europe are engaged in the most poorly paid jobs, while American workers provide the highest percentage of overseers or of the better-paid workers. (I. Hourwich, Immigration and Labour, New York, 1913.) Imperialism has the tendency to create privileged sections also among the workers, and to detach them from the broad masses of the proletariat.
It must be observed that in Great Britain the tendency of imperialism to split the workers, to strengthen opportunism among them and to cause temporary decay in the working-class movement, revealed itself much earlier than the end of the nineteenth and the beginning of the twentieth centuries; for two important distinguishing features of imperialism were already observed in Great Britain in the middle of the nineteenth century – vast colonial possessions and a monopolist position in the world market. Marx and Engels traced this connection between opportunism in the working-class movement and the imperialist features of British capitalism systematically, during the course of several decades. For example, on 7 October, 1858, Engels wrote to Marx:
The English proletariat is actually becoming more and more bourgeois, so that this most bourgeois of all nations is apparently aiming ultimately at the possession of a bourgeois aristocracy and a bourgeois proletariat alongside the bourgeoisie. For a nation which exploits the whole world this is of course to a certain extent justifiable. (MECW, K. Marx and F. Engels, Vol. 40, p. 343.)
Almost a quarter of a century later, in a letter dated 11 August, 1881, Engels speaks of the “worst English trade unions which allow themselves to be led by men sold to, or at least paid by, the middle class”. In a letter to Kautsky, dated 12 September, 1882, Engels wrote:
You ask me what the English workers think about colonial policy. Well, exactly the same as they think about politics in general. There is no workers’ party here, there are only Conservatives and Liberal-Radicals, and the workers gaily share the feast of England’s monopoly of the world market and the colonies. (Briefwechsel von Marx und Engels, Bd. II, p. 290; 1V, 433 – K. Kautsky, Sozialismus und Kolonialpolitik, Berlin, 1907, p. 79.)
This clearly shows the causes and effects. The causes are: (1) exploitation of the whole world by this country; (2) its monopolist position in the world market; (3) its colonial monopoly. The effects are: (1) a section of the British proletariat becomes bourgeois; (2) a section of the proletariat allows itself to be led by men bought by, or at least paid by, the bourgeoisie. The imperialism of the beginning of the twentieth century completed the division of the world among a handful of states, each of which today exploits (in the sense of drawing super-profits from) a part of the ‘whole world’ only a little smaller than that which England exploited in 1858; each of them occupies a monopolist position in the world market thanks to trusts, cartels, finance capital and creditor and debtor relations; each of them enjoys to some degree a colonial monopoly (we have seen that out of the total of 75,000,000 sq. km., which comprise the whole colonial world, 65,000,000 sq. km., or 86 per cent, belong to six powers; 61,000,000 sq. km., or 81 per cent, belong to three powers).
The distinctive feature of the present situation is the prevalence of such economic and political conditions that are bound to increase the irreconcilability between opportunism and the general and vital interests of the working-class movement: imperialism has grown from an embryo into the predominant system; capitalist monopolies occupy first place in economics and politics; the division of the world has been completed; on the other hand, instead of the undivided monopoly of Great Britain, we see a few imperialist powers contending for the right to share in this monopoly, and this struggle is characteristic of the whole period of the early twentieth century. Opportunism cannot now be completely triumphant in the working-class movement of one country for decades as it was in Britain in the second half of the nineteenth century; but in a number of countries it has grown ripe, overripe, and rotten, and has become completely merged with bourgeois policy in the form of ‘social-chauvinism’.
 Engels expressed similar ideas in the press in his preface to the second edition of The Condition of the Working Class in England, which appeared in 1892.–Lenin.
 This pamphlet was written by Kautsky in those infinitely distant days when he was still a Marxist.–Lenin.
 Russian social-chauvinism in its overt form, represented by the Potresovs, Chkenkelis, Maslovs, etc., and its covert form (Chkheidze, Skobelev, Axelrod, Martov, etc.) also emerged from the Russian variety of opportunism, namely, liquidationism.–Lenin.