# Imperialism, the Last Stage of Capitalism/Chapter 4

CHAPTER IV. The Export of Capital
In the old type of capitalism, that of free competition, the export of goods was the most typical feature. In the modern kind, the capitalism of monopolies, the export of capital becomes the typical feature.
Capitalism is the production of commodities at its highest stage when labour-power itself becomes a commodity. The development of exchange, both national and international, is one of the characteristics of capitalism. Inequality and irregularity in the development of individual undertakings, individual branches of production, individual countries, are inevitable under the capitalist system. England became a capitalist country before any other, and, having introduced free trade, set up in the middle of the 19th century to be the workshop of the whole world, the great provider of manufactured goods for all other countries, which in exchange were to keep her supplied with raw materials. But by the last quarter of the 19th century, this monopoly was already undermined. Other countries, protecting themselves by tariff walls, had developed into independent capitalist countries. On the eve of the 20th century, we see a new class of monopolies coming into existence. First there are combinations of capitalists in all advanced capitalist countries: ​secondly, the monopolist position of a few rich countries, in which the accumulation of capital reaches gigantic proportions. An enormous "excess of capital" becomes accumulated in the advanced countries.
Now there is no doubt that, if capitalism could develop agriculture, which to-day has been everywhere left far behind by industry, if it could raise the standard of living of the masses, who are everywhere still poverty-stricken and badly fed in spite of a dizzy advance in technical knowledge, there could be no talk of an excess of capital. And the petty bourgeois critics of capitalism advance this argument on every occasion. But in that case capitalism would not be capitalism, for the inequalities of development and the wretched condition of the masses are the indispensable conditions, the very roots of this method of production. While capitalism remains itself, the excess of capital is not put aside to raise the standard of living of the masses in a given country, for this would mean a decrease of profits for the capitalists: but it is used to increase those profits by the export of capital abroad, to the backward countries. There the profits are generally higher, for capital is scarce, the price of land is relatively small; wages are low, raw materials are cheap. The possibility of the export of capital is created by the entry of numerous backward countries into international capitalist life: the most important railway lines are either built or being built there: the elementary conditions for industrial development are in existence, etc.
​The necessity to export capital comes from the "over-development" of capitalism in certain countries where (with agriculture backward and the masses impoverished) "profitable" investments are becoming scarce
Here are approximate figures showing the amount of capital invested abroad by the three great powers.
Capital invested abroad (milliards of francs). :
| Year | | Britain | France | Germany |
| 1862 | ... | 3.6 | — | — |
| 1872 | ... | 15 | 10 (1869) | — |
| 1882 | ... | 22 | 15 (1880) | ? |
| 1893 | ... | 42 | 20 (1890) | ? |
| 1902 | ... | 62 | 27-37 | 12.5 |
| 1914 | ... | 75-100 | 60 | 44 |
This table shows that the export of capital did not develop formidable proportions until the beginning of the 20th century. Before the war, the capital invested abroad by the three great powers amounted to between 175 and 200 milliard francs. At the modest estimate of 5 per cent., it was bringing in from 8 to 10 milliard a year. This is a solid basis for imperialist oppression, and the exploitation of most of the countries and nations of the world, it is a solid basis for the capitalist parasitism of a few wealthy States.
How is this capital invested abroad divided? Where does it go? Only an approximate answer can be given to this question, but it will enlighten us on the general aspect of modern imperialism and its implications.
Continents in which the capital (approximate figures) of the Great Powers is invested (1910) (milliards of marks). :
| | Britain | France | Germany | Total |
| Europe ... | 4 | 23 | 18 | 45 |
| America ... | 37 | 4 | 10 | 51 |
| Asia, Africa, Australia | 29 | 8 | 7 | 44 |
| Total ... | 70 | 35 | 35 | 140 |
For Britain, colonies hold the leading place, even in America (Canada), not to speak of Asia and elsewhere. The gigantic export of capital is here bound up with the possession of gigantic colonies, of the importance of which for imperialism we shall speak below. In France the situation is quite different. French capital invested abroad is mostly in Europe, particularly in Russia (at least ten milliard francs). This is mostly in government loans and not in capital invested in industrial undertakings. Compared to British imperialism, which is colonial, French imperialism might be termed money-lending imperialism. In Germany, there is a third type: the German colonies are inconsiderable, and German capital invested abroad is divided fairly equally between Europe and America.
The export of capital in the countries where it is introduced has a great influence on capitalist development, which it strongly accelerates. If then, it arrests to some extent the development of countries which export it, it nevertheless always extends and intensifies the capitalist development of the world as a whole.
Almost always those countries which export their ​capital are able to obtain "advantages" which throw a certain light on the peculiarities of the age of finance-capital and monopolies. The following passage for instance, occurred in the Berlin review, Die Bank, for October, 1913.
"A comedy worthy of the pen of Aristophanes is being played just now on the international money market. Numerous countries, from Spain to the Balkans, from Russia to the Argentine, from Brazil to China are urgently seeking loans; sometimes very insistently. The money market is not at the moment very bright and the political outlook is unpromising. But no particular money market can make up its mind to refuse the loan, fearing that another might do so and obtain in return valuable considerations. In this kind of business, the lender almost always gets something: a beneficial commercial treaty, a coal mine, the construction of a port, a profitable concession, or an order for artillery."
Finance-capital has created the period of monopolies, and monopolies bring with them everywhere their own methods: the utilisation of business "connections" for profitable transactions takes the place of open competition on the market. Nothing is more usual than to stipulate, before making a loan, that some of it will be spent on purchases in the country of issue, particularly in orders for war material or for ships. In the course of the last two decades (1890-1910), France often had recourse to this method. The export of capital abroad thus becomes a way to encourage the export of commodities. In these circumstances, transactions, especially between big firms, take on a form "bordering on corruption," as Schilder ​"delicately" puts it. Krupp in Germany, Schneider in France, Armstrong in England, are instances of firms closely connected with all-powerful banks and governments, whom it is not easy to "avoid" when arranging a loan.
France, in making loans to Russia, by the commercial treaty of the 16th September, 1905, secured concessions to run till 1917. She did the same thing when the Franco-Japanese commercial treaty was made on the 19th August, 1911. The tariff war between Austria and Serbia, which lasted with a seven-months' interval, from 1906 to 1911, was partly caused by competition between Austria and France for keeping Serbia supplied with war material. In January, 1912, M. Paul Deschanel said in the Chamber of Deputies, that French firms from 1908 to 1911 had supplied 45,000,000 francs' worth of war material to Serbia.
A report from the Austro-Hungarian Consul at Sao-Paulo (Brazil), states: "The construction of Brazilian railways is chiefly done by capital from France, Belgium, Britain and Germany. The countries involved secure orders for railway material during the preliminary financial negotiations connected with railroad construction."
Finance-capital thus extends its tentacles literally all over the world. Banks founded in the colonies, or their branches, play an important part in these operations. German imperialists look with envy on the old colonising nations, which in this respect are "well established." Great Britain had, in 1904, 50 colonial banks with 2,279 branches (in 1910, there were 72 banks with 5,449 branches); France had 20 with 136 branches; ​Holland 16 with 68 branches; and Germany had a "mere" 13 with 70 branches.
The American capitalists, on their side, are jealous of the English and the Germans: "In South America," they sadly wrote in 1915, "five German banks had forty branches and five English banks had seventy. England and Germany during the last twenty-five years have invested in the Argentine, Brazil and Uruguay, about four billion dollars, which puts under their control 46 per cent. of the total trade of these three countries."
The countries exporting capital have divided the world in the metaphorical sense of the term. But finance-capital has also led to an actual division of the world.
* ↑ 61.—"The Annals of the American Academy of Political and Social Science," vol. lix., May, 1915, p. 301. We read here also (p. 331), that the well-known statistician, Paish, estimated the amount of capital exported by England, France, Belgium and Holland at 40 milliard dollars or 200 milliard francs.
* ↑ 62.—Die Bank, 1913, 2, p. 1024.
* ↑ 63.—Hobson: "Imperialism," London, 1902, p. 58. Riesser, op. cit., pp. 395, 404. P. Arndt in "Weltwirtschaftliches Archiv," vol. vii., 1916, p. 35; Neymarck in the "Bulletin of the International Institute of Statistics"; Hilferding: "Finance Capital," p. 492; Lloyd George: speech in the House of Commons, 4th May, 1915. (Daily Telegraph, 5th May, 1915.). B. Harms: "Probleme der Weltwirtschaft," Jena, 1912, p. 235. Dr. Siegmund Schilder: "Entwickelungstendenzen der Weltwirtschaft," Bremen, 1912, vol. i., p. 150. George Paish: "Great Britain's Capital Investments," etc., in the "Journal of the Royal Statistical Society," vol. lxxix., 1910, p. 167. George Diouritch: "L'Expansion des banques allemandes à l'étranger, ses rapports avec le développment économique de l'Allemagne," Paris, 1909, p. 84.
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