surplus which could not be reinvested in the domestic European economies
because local demand was insufficient to make that investment profitable. To
create that market would have required the consumption power of the work-
ing classes to have been strengthened by increases in wages. But for employ-
ers and the owners of capital to do that would have reduced the level of
surplus value created by labour and therefore the level of profits. So the
European powers were forced to look elsewhere to increase the profitability
of their investments. Exporting capital was for Lenin completely consistent
with low costs of production, low wages and the use of cheap raw materials.
The expansion of colonial conquests and annexations in the second half of the
nineteenth century coincided with capitalism’s transition from its competitive
form, based on the export of goods, to its monopolistic form, based on the
export of capital. ‘The non-economic superstructure which grows up on the
basis of finance capital, its politics and its ideology, stimulates the striving for
colonial conquest’ (Lenin, 1917, p. 84). He quoted Hilferding approvingly:
‘Finance capital does not want liberty, it wants domination.’
Lenin was unable to deal with the political aspects of imperialism
because his pamphlet was written for ‘legal’ publication in Russia and
therefore had to pass the tsarist censorship. His non-economic references
were mainly restricted to European conquests in Africa, Asia and the
Americas. But he did risk noting that British and French imperialists saw
the settlements for surplus population and the new markets provided by
colonies as the means of avoiding civil war in Europe.
Lenin was also aware that finance capital could thrive without colonies.
He thus raised another issue that was to become central to later debates
about imperialism. There were other forms of dependency. Countries could
be politically independent yet ‘enmeshed in the net of financial and diplo-
matic dependence’ (p. 85). Argentina was an example, so financially
dependent on London as to be a British ‘commercial colony’, with firm
bonds between British finance capital and the Argentine bourgeoisie, lead-
ing businessmen and politicians (p. 85). Yet another form of dependency
was found between Britain and Portugal, a ‘British protectorate’ providing
a market for goods and capital as well as safe harbours and other facilities.
During the period of capitalist imperialism the relations that have always
existed between ‘big and little states’ became a ‘general system’ and part of
the process of dividing the world: ‘they became a link in the chain of opera-
tions of world finance capital’ (p. 86). Other than this, Lenin did not give
a detailed discussion of colonial areas. Like Bukharin, he took it for granted
that imperialism would have a totally adverse effect on indigenous peoples
(Kiernan, 1974, p. 46).
Theories of Imperialism and Colonialism 27