The News Megathread Imperialism Reading Group: Week 2 - January 20th to January 26th, 2025

Welcome to the second week of the Imperialism Reading Group! Last week's thread is here.

This is a weekly thread in which we read through books on and related to imperialism and geopolitics. How many chapters or pages we will cover per week will vary based on the density and difficulty of the book, but I'm generally aiming at 30 to 40 pages per week, which should take you about an hour or two.

The first book we are covering is the foundation, the one and only, Lenin's Imperialism: The Highest Stage of Capitalism. We will read two chapters per week, meaning that we will finish reading in mid-to-late February. Unless a better suggestion is made, we will then cover Michael Hudson's Super Imperialism, and continue with various books from there.

Every week, I will write a summary of the chapter(s) read, for those who have already read the book and don't wish to reread, can't follow along for various reasons, or for those joining later who want to dive right in to the next book without needing to pick this one up too.

This week, we will be reading Chapter 3: Finance Capital and the Financial Oligarchy, and Chapter 4: Export of Capital.

Please comment or message me directly if you wish to be pinged for this group.

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Chapter 3 is a little harder than the previous chapters but nothing too strenuous yet I hope, while Chapter 4 is short and hopefully easy to understand to those who pay a modicum of attention to international news, given how this sort of inter-imperialist jockeying for loans from the IMF or BRICS or whatever has been heating up over the last few years.
I'll be posting my summaries in the reply to this comment, for use by current and future readers of this thread. It's obviously no supplement for reading the real thing, and I've largely skipped his (very justified) attacks of bourgeois economists; my summaries basically take what Lenin says and assumes they're true without mentioning the facts and figures Lenin quotes (except when they really help to clarify what he means).
- Chapter 3: Finance Capital and the Financial Oligarchy
  As capitalism progresses, money capital is separated from industrial/productive capital. Rentiers, who purely survive on income from money capital, are separated from entrepreneurs, who are involved in the management of productive capital. Under imperialism, the highest stage of capitalism, financial oligarchy takes hold and the rentier is dominant.
  Nonetheless, as bank monopolists sink their funds into industry, and take control away from the original industrialists, they increasingly become industrial capitalists themselves. Bank capital which is transformed into industrial capital can thus can be called finance capital. Under a system which produces commodities and has private property, such as capitalism, a financial oligarchy invariably arises. Part of what enables this is the “holding system”:
  A concern needs only hold 50% of the shares to control another company (in practice, about 40%). This means that, through subsidaries companies, a principal company may control a set of subsidiary companies which then control their own subsidiaries and so on, while only requiring a relatively small amount of capital, by using the capital of acquired subsidiaries to control yet more subsidiaries. For example, the General Electric Company held sufficient shares in ~200 other companies to dominate their dealings, and thereby controlled a total capital of 1500 million marks despite not actually possessing that capital directly.
  If the ownership of shares is “democratized” (”every worker should be a shareholder!” etc), the financial oligarchy can actually further strengthen itself by overpowering small, scattered shareholders. There are certain limits on this process; Germany, for example, does not allow shares to be issued below the value of 1000 marks. However, in more advanced capitalist countries, like Britain, the limit is just one pound (20 marks), which allows them to be more imperialist.
  As these holding (”mother”) companies are technically separate from the subsidiary (”daughter”) companies, there are many tricks that can be performed without accountability, such as drawing up false balance sheets which do not violate the law on strict technicalities but nonetheless allow the monopolists to confidently make otherwise very risky major transactions that smaller companies cannot do, and conceal information from shareholders.
  In Russia, the banks are divided into 1) those under this holding system and 2) “independent banks; the former consists of German, British, and French holdings. Over 75% of the capital of the big banks actually belonged to banks that were mere daughter companies of foreign banks; thereby making Russian shareholders relatively powerless compared to German shareholders. Additionally, over 40% of the working capital in the major St. Petersburg banks is devoted to mining, oil, metallurgical, and cement industries - indicating the merging of industrial and bank capital.
  There are many tricks that monopoly allows you to do. Oligarchs can buy up the shares of many firms and then establish high prices under their monopoly, increasing their profits well in excess of the initial price of buying the shares. Additionally, bank monopolies can make substantial profit out of large loans received by countries, such as that which Morocco received in 1904 in which ~20% of the total loan went to French monopoly banks (essentially, international usury). A country can have a stagnant population and economy and yet grow rich via usury. An extraordinarily high rate of profit can be obtained via bonds; the profit gained by floating foreign loans is much more profitable than regular businesses.
  During industrial booms, the financial oligarchy makes large profits; in industrial depressions, these oligarchs buy failing businesses for cheap, and are “reconstructed” or “reorganised”, and new capital invested, in order to bring in enough profit to make up for the purchase. This not only increases the profits of the banks, but also eliminates competition. Oligarchs also speculate in land in the suburbs of growing towns, also allowing them a monopoly on rents.
  A monopoly is unbound by the form of government and most other political details; political or economic “freedom” is made increasingly worthless. Those who work for the government may aspire to work for the large banks, and those in state cartel committees may go on to work for those very same cartels.
  The growth in issued securities grew relatively slowly in the decades after 1870, and then exploded, doubling from 1900 to 1910 (reflecting the aforementioned establishment of the financial oligarchy at the turn of the century). Britain, the United States, France, and Germany dominate the total issued securities, jointly owning 80% of the global total, with Russia in distant fifth and the rest of Europe far behind. Two of these economies are old capitalist economies and possess many colonies (Britain and France); while the other two are rapidly developing and have capitalist monopolies in industry (Germany and the United States). The rest of the world are the debtors to these four countries.
  
  Chapter 4: Export of Capital
  During the era of capitalism with free competition, there was the export of goods. During the era of capitalism with monopoly rule, is the export of capital.
  As capitalism develops, corporations and countries alike grow unevenly, resulting in internal and international exchange; such as England during the mid-19th century, who reached industrial production first among the countries of the world. By the end of the 19th century, other European powers erected tariffs to encourage their own industries to develop, thereby no longer being mere suppliers of raw material. Now, there are monopoly capitalist associations throughout Europe, and particularly of the four aforementioned richest countries; they have produced large surpluses of capital.
  A lack of internal development (e.g. through boosting agriculture) is no accident and is in fact a fundamental condition of capitalism; if surplus capital was used to raise the living standards of the masses, it would decrease their profits. This becomes a positive feedback loop: the poverty of the masses means they have less money, which means they cannot buy as many commodities, which means they generate less profit for the capitalists, which prompts the capitalists to find other profitable avenues rather than supporting the masses, causing further impoverishment.
  The profitable avenue is to export capital abroad. Profits are higher abroad because capital is scarce, land and raw materials are cheap, and wages are low. Transportation lines are constructed and the basic conditions for industrial development are being created. As with other phenomena we’ve discussed so far, the export of capital began reaching major heights at the turn of the 20th century. Just before WW1, the capital invested abroad by Britain, France, and Germany was ~200 billion francs, providing ~10 billion francs per year of income, which allows them the money to further exploit the many nations of the world.
  Naturally, Britain invests largely in their colonies in America, Asia, Africa, and Australia, but not so much in Europe. French investments are instead mostly in Europe, but also differ from British imperialism for being usurious capital gained from government loans, whereas Britain’s capital is largely colonial. Germany has few colonies and instead invests in Europe and America.
  Exporting capital delivers and accelerates the development of capitalism to foreign countries; development is decelerated at home and in exchange, accelerated abroad. However, capital-exporting corporations obtain advantages, such as favourable treaties or ownership of some station or harbor. France, for instance, often stipulates that part of the loan be spent on French war materials or ships, to create a market for commodities. Or, British capitalists may stipulate that transportation links in the developing world use building materials bought from British corporations. The capital-exporting corporations and countries often look at each other with jealousy; particularly Germany’s poor colonial position compared to Britain.

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