# Imperialism, the Last Stage of Capitalism/Chapter 8

CHAPTER VIII. Parasitism and the Decay of Capitalism
We have yet to examine a very important aspect of imperialism, an aspect to which too little attention is generally assigned in the treatment of this subject. One of the defects of the Marxist, Hilferding, is that, as compared with the non-Marxist Hobson, he has taken a step to the rear in this regard. We intend to deal with the parasitism which is characteristic of imperialism.
As we have seen, the most deeply-rooted economic foundation of imperialism is monopoly. It is capitalist monopoly, that is monopoly which has grown out of capitalism, and exists in the general capitalist environment, of commodity production of goods and competition, and remains in permanent and insoluble contradiction with this general environment.
However, like all monopoly, this capitalist monopoly infallibly gives rise to a tendency to stagnation and decay. In proportion as the monopoly prices become fixed, even though it be temporarily, so the stimulus to all progress tends to disappear: and so also arises the economic possibility of slowing down technical progress. For instance, in America a certain Mr. Owens invents a machine intended to revolutionise the manufacture of bottles. The German bottle-manufacturing trust buys the patent from Owens and keeps it in its strong-rooms, thus holding up its utilisation. ​Certainly monopoly under capitalism can never completely, and for a long time, set aside competition of the world market. Certainly, the possibility of diminishing the costs of production and increasing profits by introducing technical improvements, is an influence in the direction of change. Even so, the tendency to stagnation and corruption which is characteristic of monopoly continues to make itself felt, and in certain spheres of production, in certain countries, for certain periods of time, it takes the upper hand.
Ownership (monopoly) of colonies which are especially big, rich and well situated, acts in the same way.
Moreover, Imperialism is an immense concentration of money capital in a few countries, a concentration which amounts to 100 or 150 milliard francs in various securities. Hence the inevitable development of a class, or rather of a category, of bondholders (rentiers), people who live by clipping coupons, people entirely strangers to activity in any enterprise whatever, people whose profession is idleness. The export of capital, one of the essential economic bases of imperialism, detaches still more bondholders from production; and sets the seal of parasitism on the whole country, living on the labour of several overseas countries and colonies.
"In 1893," writes Hobson, "British capital invested abroad represented about 15 per cent. of the total wealth of the United Kingdom." Let us remember that in 1915 this capital had increased about two and a half times. "Aggressive imperialism," says Hobson further on, "which costs the taxpayers so dear, and means so little for the ​manufacturer and the trader, is a source of very great profit to the investor."
The annual revenue which Great Britain receives from all its foreign and colonial trade, export and import, is estimated by Giffen, the statistician, at £18,000,000 sterling for 1899, calculating an average revenue of 2.5 per cent. on the total sum of £800,000,000 business.
However important this amount may be, it is not enough to explain the aggressive imperialism of Great Britain. This is explained by the 90 to 100 million pounds sterling in revenue drawn from capital "invested" in revenue drawn in the shape of interest by bondholders.
The revenue of the British bondholders is five times greater than that from the foreign trade of the greatest trading country in the world. Such is the essence of imperialism and imperialist parasitism.
And so the notion of a "Bondholder State" (Rentnerstaat) or of a moneylending State is passing into current use in economic literature dealing with imperialism. The world has fallen apart into a handful of moneylending States and a wast majority of debtor-States.
"Amongst investments abroad," says Schulze-Gaevernitz, "first rank must be assigned to those settled upon countries which are allied or politically dependent: Britain gives loans to Egypt, Japan, China, South America. Her fleet plays the part of policeman in case of necessity. Britain's political power protects her from a revolt of her debtors." Sartorius von Waltershausen in his work on the State System of Investing Abroad, gives Holland as the model moneylending State, ​and points out that Britain and France have set their feet in the same path. Schilder considers that five industrial nations have become "very typical creditor nations": Britain, France, Germany, Belgium and Switzerland. Holland does not appear on this list simply because it is "slightly industrialised." The United States are creditors only of other American countries.
"Britain is being gradually transformed from an industrial State into a creditor State. In spite of the absolute increase in industrial production and export, the relative importance of revenue, from interest and dividends, issues and speculations is on the increase when the whole national economy is taken into account. In my opinion, it is precisely this fact which is at the base of imperialist expansion. The creditor is more firmly tied to the debtor than the merchant is to the buyer."(Schulze-Gaevernitz).
Concerning Germany, A. Lansburg, the editor of Die Bank wrote the following in 1911 in an article entitled, Germany as a Bondholder Nation: "People laugh willingly in Germany at the tendency which France has to become a Bondholder Nation. But they forget that, so far as the middle class is concerned, the situation in Germany is becoming more and more like that in France."
The Rentier State is the state of parasitic decaying capitalism, and this circumstance cannot fail to influence all the social-political relations of the country affected; and particularly the two fundamental tendencies of the working class movement. To make this stand out most clearly, let us listen to Hobson, whose testimony inspires more ​confidence since he cannot be suspected of leanings to "orthodox Marxism"; and since, being English, this author is well acquainted with the situation which exists in the country which is richest in colonies, in finance-capital, and in imperialist experience.
Describing the connection between imperialism and the financiers, the growing profits from armaments, etc., Hobson, with the Boer War fresh in his mind, wrote as follows:
"The people directing this definitely parasitical policy are the capitalists; but the same causes influence various sections of workers. In numerous towns the most important industries depend upon orders from the government. The imperialism of the metallurgical and shipbuilding centres is largely due to this fact."
The author quoted considers that there are two causes which weakened former empires, viz., "economic parasitism" and the formation of armies composed of subject races. The first is the custom of economic parasitism, in virtue of which the ruling State makes use of its provinces, its colonies, and its dependencies, to enrich its ruling class and to corrupt its lower classes in order to keep them quiet." Let us add for our part that the economic possibility of such corruption, whatever may be its form, requires the inflated profits produced by monopoly.
As for the second cause, 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 more recently by natives. In India, as 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."
In the following words Hobson draws a picture of the possible results following the partition 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 large body of personal servants and workers in the transport trade and in the final stages of the 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 aristo​cracy. Let those who would scout such a theory as undeserving of consideration examine the economic and social conditions of districts in Southern England to-day, 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 to-day are moving in this direction, and, unless counteracted or diverted, make towards some such consummation."
Hobson is quite right. If the forces of imperialism do not meet with resistance, they will lead to what he has described. The meaning of the "United States of Europe," in the contemporary imperialist sense, is correctly appreciated by him. He should only have added that, even inside the working class movement, the opportunists, who are for the moment dominant in nearly all countries, are "working" systematically and without except in this very direction. Imperialism, which means the partition of the world and the exploitation not of China alone, and which means the high profits of monopoly for a handful of very rich countries, creates the economic possibility of corrupting the upper layers of the proletariat, and thereby nourishes, defines and strengthens opportunism. Only, it must not be forgotten that the ​Social-Liberal Hobson naturally cannot see the forces acting directly against imperialism in general and opportunism in particular.
The German opportunist, Gerhard Hildebrand, who in his day was expelled the Party for defending imperialism, and would to-day make an excellent leader for the so-called "Social-Democratic" Party of Germany, completes Hobson's theory by giving his blessing to the formation of a "United States of Western Europe" (without Russia) for "joint action against . . . the African negroes, the "great Islamic movement"; for the "upkeep of a powerful army and navy against the Chino-Japanese coalition."
The description of British Imperialism in Schulze-Gaevernitz's book shows us the same parasitical traits. The national income of Great Britain approximately doubled from 1865 to 1898, while the income "coming from abroad" increased nine times in the same period. If the "education of the negro for work" (an education which cannot do without compulsion) is a merit of imperialism, then the "danger" of imperialism is that "Europe will shift the burden of physical toil—first agricultural and mining, then of heavy industry—on to the black races, and will remain itself at leisure in the occupation of bondholder, thus perhaps paving the way for the economic and, later, the political emancipation of the coloured races."
An increasing proportion of land is being taken away from agriculture in Britain for sport, the diversion of the rich. It is said of Scotland—the most aristocratic meeting place for hunting and for sport—that it "lives on its past and on Mr. Carnegie." Britain annually spends £14,000,000 ​sterling on racing and fox-hunting. The number of bondholders in Great Britain has risen to about 1,000,000. The percentage of producers amongst the total population is becoming smaller.
| Years. ​ ​ | | Population in millions. ​ | No. of workers in the big industries. | Percentage of producers in the total. |
| 1851 | ... | 17.9 | 4.1 | 23 per cent. |
| 1901 | ... | 32.5 | 4.9 | 15 per cent. |
And, in speaking of the British working class, the bourgeois student of British Imperialism in the 20th Century, is obliged to distinguish systematically between the "upper layers" and the "lower layers, or proletarians properly so called." The upper layers furnish the main body of co-operators, of trade unionists, of members of sporting bodies, and of numerous religious sects. Universal suffrage, which is still "sufficiently restricted" in Britain "to exclude the lower layers of proletarians properly so called" is adapted to their needs. In order to present the condition of the British working class under its best possible aspect, only this upper layer—which constitutes only a minority of the proletariat—is generally spoken of. For instance: "The question of unemployment is mainly a question of London and the lower proletarian elements, about whom the politicians care little." It would be better to say: with whom the bourgeois politicians and the "Socialist" opportunists reckon little.
Amongst the special features of imperialism, connected with the facts that we are describing, there is the decreased rate of emigration from imperialist countries, and the increased rate of emigration from the backward countries, where ​low wages are paid, into the former. English emigration, Hobson remarks, begins to fall off after 1884. In that year 242,000 emigrants left England. In 1900, only 169,000 English people left the mother country. German emigration reached its maximum between 1880 and 1890 with a total of 1,453,000 emigrants. In the course of the following two decades it fell to 544,000 and 341,000 respectively.
On the other hand there was an increase in the number of workers coming into 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 were agricultural workers.
In France, "a notable proportion" of mining workers consists of foreigners: Polish, Italian and Spanish. In the United State, immigrants from Eastern and Southern Europe provide the most poorly-paid work hands, and American workers provide the highest percentage of overseers or of better-paid workers. Imperialism has thus a tendency to create privileged sections amongst the workers, too, and to detach them from the main proletarian masses.
It is worth noticing that in Britain, the tendency of imperialism to divide the toilers in this way, to encourage opportunism amongst them, and to give rise to a temporary organic decay in the working class movement, showed itself much earlier than the end of the 19th and beginning of the 20th centuries. For two big distinctive features of imperialism applied to Britain from midway through the 19th century: vast colonial posses​sions and a monopolist position in world markets.
Marx and Engels systematically followed, over some decades, this relation between working class opportunism and the imperialistic peculiarities of English capitalism. Engels, for instance, wrote the following to Marx on 7th October, 1858: "The English working class is actually becoming more and more bourgeois, which would seem to show that this most bourgeois of all the nations apparently wanted to bring matters to such a pass as to have a bourgeois aristocracy and a bourgeois proletariat side by side with the bourgeoisie. Obviously this is, to a certain extent, well calculated on the part of a nation which is exploiting the whole world." Almost a quarter of a century later on, in a letter of August 11th, 1881, Engels speaks of the worst English trade unions which "allow themselves to be led by men bought by the capitalists or at least paid by them." In a letter to Kautsky, of the 12th September, 1882, Engels wrote: "You ask me what the English workers think of colonial policy? The same thing as they think about politics in general. There is no working class party here, there are only Conservative and Liberal Radicals, and the workers very quietly enjoy together with them the fruits of the British colonial monopoly and of the British monopoly of the world market." Engels set forth these ideas for the general public in his preface to the second edition of The Condition of the English Working Class which appeared in 1892.
Here he clearly points out causes and effects.
The causes are:
(1) Exploitation of the whole world by this country.
​(2) Its monopolistic position on the world market.
(3) Its colonial monopoly.
The effects are:
(1) The transformation of a section of the British workers into the middle class.
(2) The opportunity of leading it which part of the working class accords to a section corrupted by the capitalist class, or at least paid by it.
Now, the imperialism of the beginning of the 20th century has completed the division of the world amongst a very few States, each of which to-day exploits (i.e., draws surplus-value from) a part of the world scarcely less than England exploited in 1858. Each of them retains, by means of trusts, cartels, finance-capital, and the relations between debtors and creditors, a monopoly position on the world market. Each of them enjoys to some degree a colonial monopoly. (We have seen that, of 75,000,000 sq. km. of total colonial area, 65,000,000 sq. km., or 86 per cent. belong to six great powers: 61,000,000 sq. km., or 81 per cent. belong to three powers.)
The special feature of the present situation consists in such economic and political conditions as could not but intensify the incompatability between opportunism and the general and vital interests of the working class. Embryonic imperialism has become a dominant system; capitalist monopolies have come to occupy the chief place in economics and politics; the division of the world has been completed. On the other hand, instead of an un​disputed monopoly by Britain, we see a few imperialist powers disputing among themselves as to the sharing in this monopoly and this struggle is characteristic of the whole period at the beginning of the twentieth century.
Opportunism can, therefore, no longer triumph in the working class of any country for long decades, as was the case in England in the second half of the 19th century. But, in certain countries it has grown ripe, over-ripe and rotten, and has become entirely confused with bourgeois policy in the shape of "socialist jingoism."
* ↑ 81.—Hobson, pp. 59 and 60.
* ↑ 82.—Schulze-Gaevernitz: "Brit. Imp." pp. 320 et seq.
* ↑ 83.—Sartorius von Waltershausen: "D. volskw. Syst.," etc., iv.
* ↑ 84.—Schilder, p. 393.
* ↑ 85.—Die Bank, 1911, i, pp. 6 and 11.
* ↑ 86.—Hobson, pp. 103, 144, 205, 335, 386.
* ↑ 87.—Gerhard Hildebrand: "Die Erschütterung der Industrieherrschaft und des Industriesozialismus," 1910, Jena, p. 229.
* ↑ 88.—"Statistik des Deutschen Reichs," vol. 211.
* ↑ 89.—Henger: "Die Kapitalanslage der Franzosen," Stuttgart, 1913.
* ↑ 90.—Hourwich: "Immigration and Labor," New York, 1913.
* ↑ 91.—"Briefwechsel von Marx und Engels," vol. ii., p. 290; iv., p. 453. K. Kautsky: "Sozialismus und Kolonialpolitik," Berlin, 1907, p. 79; this last is a brochure written in that long past period when Kautsky was still a Marxist.
* ↑ 92.—The Russian social-chauvinism of Messrs. Potressov, Tchenkely, Martov and Co., in a form open or veiled (that of Skobelev, Axelrod, etc.), was also born of a sort of opportunism, to wit, Russian "liquidationism."
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