Lenin, imperialism, and the course of history

A question from Yahoo! Answers:

How is lenin’s theory of imperialism relevant to today’s global economic reality?

what are the strenghts and weaknesses of these theories

Let’s start with the date and the title; Lenin’s major work on imperialism came out in 1916 and was titled Imperialism as the highest and last stage of capitalism (in Russian: Imperializm kak vysshaya i poslednyaya stadiya kapitalizma; for whatever reason, the generally accepted English title was shortened to Imperialism: The Highest Stage of Capitalism). Consistent with the title, Lenin postulated a link between capitalism and imperialism, never mind the ample historical evidence that imperialism existed well before capitalism. Later history showed that even the socialist revolution, which Lenin saw as the ultimate remedy against imperialism, can have imperialist tendencies (one only needs to look at post-revolutionary experiences of Russia and China).

One observation that Lenin made, however, was a very good one. Symbiotic relationships between large companies (in Lenin’s language, “imperialistic monopolies”) and the national government can sometimes lead to wars that are fought for the benefit of those companies at the expense of the rest of the society. An American general named Smedley Butler later made very similar observations on very different factual material in his 1935 book War is a Racket.

Lenin thought (correctly) that monopolization of the economy is a bad thing and the symbiotic relationships between monopolies and government are even worse (with the likes of East Indian Company, designed to operate colonies for profit with no governing law, being the ultimate evil). But he (incorrectly) viewed those things as inevitable under capitalism; in his view, things like anti-trust law, regulation of campaign finance, and legislative oversight were just forms of window-dressing, aimed at placating the masses. It can be said that he underestimated the power of constructive (meaning, aimed at improving the system rather than destroying it) populism.

One area where Lenin ultimately proved completely wrong was his belief that under capitalism, the government cannot have a cohesive set of domestic policies, aimed at easing the plight of the unfortunate on the one hand and at fostering civilized relationships between workers and employers on the other. The capitalist system turned out to be quite capable of adapting to The New Deal and even to Mitbestimmung

Finally, Lenin thought (correctly) that all empires are doomed in the long-run (as David Ricardo pointed out a hundred years before Lenin). But Lenin believed (incorrectly, as it turned out) that the demise of an empire will lead to a socialist revolution in the imperial center. Lenin, interestingly, believed the same thing imperialists did: he thought that colonialism was profitable, while in reality, it could not survive without massive government subsidies. So his idea was that the inevitable gaining of independence by colonies would bring about a sharp decline of the living standard in the imperial center. In reality, the exact opposite happened: with no further need to subsidize colonies, the former imperial centers poured the money inward, into education, healthcare, and old-age pensions (and farm subsidies, I might add, but that would be a wholly different conversation…)

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