John Atkinson Hobson and Vladimir Lenin both claimed that the West live by a system of Capitalist Imperialism, a system that fosters powerful monopolies over free trade and inevitably leads to war.  Both Hobson and Lenin claimed that as monopolies in both the industrial and the financial sectors of society formed in the second half of the nineteenth century, imperialistic policies were needed to protect their financial interests and Western governments were more than willing to do this, as their economies depended on these monopolies.  As many industrialists and financiers stand to make considerable gains from war, Hobson and Lenin argued that they actively encourage conflicts such as World War One. 

Vladimir Lenin.  Image source

In his essay, Imperialism, the Highest Stage of Capitalism, first published in 1916, Vladimir Lenin claimed that the most important aspect of the Capitalist economy from c1870 was the transformation from an environment of competition to a situation where monopolies had formed.  Often, cartels and trusts controlled seven or eight tenths of all the output of a given industry and as these cartels merged or had understandings and agreements with each other on issues such as product prices.  Free trade was lost and a small number of capitalists gained large amounts of power and took control of key aspects of society such as skilled labour and transport.

John Atkinson Hobson, a widely popular English economist and Imperial critic, wrote in his work, Imperialism, A Study, first published in 1902, “of a small minority of white men, officials, traders, and industrial organisers, exercising political and economic sway over great hoards of population regarded as inferior and as incapable of exercising any considerable rights of self government, in politics or industry”.

One of the most important features of the transformation of Capitalism into Imperialist Capitalism was the changing role of the banks, which went from being what Lenin called  “small, numerous modest intermediaries” into powerful monopolies controlling vast amounts of capital.  For example by 1909, eighty three per cent of total German bank capital was controlled by the nine big Berlin banks (along with smaller affiliated banks that these banks had shares or holdings in).  As the banks gained more power, industry became more dependent on them and banks, industry and commercial enterprises became more tied to one another. 

Bank directors began acquiring positions on supervisory boards or boards of directors within industry and vice versa.  Employees from the six biggest banks in Berlin held important positions in seven hundred and fifty one companies and some were even chairmen.  On the boards of the same six banks in 1910 were fifty-one of the most powerful manufactures, including directors from the German arms company Krupp, leading to the development of what Lenin saw as, “a sort of division of labour among some hundreds of kings of finance who reign over modern Capitalist society”.

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According to Hobson, “the economic root of imperialism is the desire of strong organised industrial and financial interests to secure and develop at the public expense …. private markets for their surplus goods and their surplus capital.  War, militarism and a “spirited foreign policy” are a means to this end”.

By the late nineteenth century, all developed countries, through the growth of production and capital, exceeded the growth of national consumption.  This led to new markets being needed for financers and industrialists to unload their surplus capital and goods. However this was often resented by native people and there was also the threat posed by other powerful nations with their own surplus goods to unload.  Therefore, as Hobson pointed out, “the policy of imperialism to be effective requires at times the outlay of large unforeseen sums on war and military equipment”.

Lenin stated: “The more capitalism is developed, the more the need for raw material is felt, the more bitter competition becomes, and the more feverishly the hunt for raw materials proceeds throughout the whole world, the more desperate becomes the struggle for the acquisition of colonies.  At the same time monopoly, which has grown out of free competition, does not abolish the latter, but exists over it and along side of it, and thereby gives rise to a number of very acute, intense antagonisms, friction and conflict”.

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It can be argued that many leading capitalists would stand to lose money in the event of war through the loss of over-seas trade and investment, so many important industrialists and financiers are against war.  Despite this, it is undeniable that some of the most influential industrialists, such as the weapons manufacturers, profit hugely from conflict and hold considerable sway with their governments.  It can also be argued that if all the great financiers were against war then it would not happened, as it is them that decide where the capital goes and no “quick direction of capital” is possible without their approval.   

As long as Capitalist nations are producing surplus goods in order to continually increase profits, new markets will need to be secured to sell those goods, by force if necessary.  Added to this, as long as powerful corporations are allowed to make huge profits from war, for example from the sale of arms, (although this is just the tip of the iceberg), then war is inevitable for Western nations.