THE EXPORT OF CAPITAL
IV. THE EXPORT OF CAPITAL
Typical of the old capitalism when free competition had undivided sway, was the export of goods. Typical of the latest stage of capitalism, when monopolies rule, is the export of capital.
Capitalism is commodity production at its highest stage of development, when labour power itself becomes a commodity. The growth of internal exchange, and particularly of international exchange, is the characteristic distinguishing feature of capitalism.
Uneven and spasmodic development of individual enterprises, of individual branches of industry and individual countries, is inevitable under the capitalist system. England became a capitalist country before any other, and by the middle of the nineteenth century, having adopted free trade, claimed to be the "workshop of the world," the purveyor of manufactured goods to all countries, which in exchange were to keep her supplied with raw materials. But in the last quarter of the nineteenth century, this monopoly was already undermined, for other countries, sheltering themselves by "protective" tariffs, developed into independent capitalist states. On the threshold of the twentieth century we see the formation of a new type of monopoly: firstly, monopolist capitalist combines in all capitalistically developed countries; secondly,the monopolist position of a few very rich countries, in which the accumulation of capital has reached gigantic proportions. An enormous "superabundance of capital" has arisen in the advanced countries.
It goes without saying that if capitalism could develop agriculture, which today frightfully lags behind industry everywhere, if it could raise the standard of living of the masses, who are everywhere still half-starved and poverty stricken, in spite of the amazing technical progress, there could be no talk of a superabundance of capital. This "argument" is very often advanced by the petty-bourgeois critics of capitalism. But if capitalism did these things it would not be capitalism; for both uneven development and a semi-starvation level of existence of the masses are fundamental and inevitable conditions and premises of this mode of production. As long as capitalism remains what it is, surplus capital will be utilized not for the purpose of raising the standard of living of the masses in a given country, for this would mean a decline in profits for the capitalists, but for the purpose of increasing profits by exporting capital abroad to the backward countries. In these backward countries profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap. The possibility of exporting capital is created by the fact that a number of backward countries have already been drawn into world capitalist intercourse; main railways have either been or are being built there, the elementary conditions for industrial development have been created, etc. The necessity for exporting capital arises from the fact that in a few countries capitalism has become "overripe" and (owing to the backward stage of agriculture and the impoverished state of the masses) capital cannot find a field for "profitable" investment.
Here are approximate figures showing the amount of capital invested abroad by the three principal countries:
(In billions of francs)
Year | Great Britain | France | Germany |
1862 . . . . . . . . . . . 1872 . . . . . . . . . . . 1882 . . . . . . . . . . . 1893 . . . . . . . . . . . 1902 . . . . . . . . . . . 1914 . . . . . . . . . . . | 3.6 15.0 22.0 42.0 62.0 75-100.0 | --- 10 (1869) 15 (1880) 20 (1890) 27-37 60 | --- --- ? ? 12.5 44.0 |
This table shows that the export of capital reached for midable dimensions only in the beginning of the twentieth century. Before the war the capital invested abroad by the three principal countries amounted to between 175,000,000,000 and 200,000,000,000 francs. At the modest rate of 5 per cent, the income from this sum should have reached from 8 to 10 billion francs a year. A solid basis for imperialist oppression and the exploitation of most of the countries and nations of the world, for the capitalist parasitism of a handful of wealthy states! How is this capital invested abroad distributed among the various countries? Where is it invested? Only an approximate answer can be given to this question, but one sufficient to throw light on certain general relations and connections of modern imperialism.
APPROXIMATE DISTRIBUTION OF FOREIGN CAPITAL
(ABOUT 1910)
(In billions of marks)
| ||||
Great
Britian |
France
|
Germany
|
Total
| |
Europe . . . . . . . . . . . . .
America . . . . . . . . . . . .
Asia, Africa, Australia
| 4
37
29
| 23
4
8
| 18
10
7
| 45
51
44
|
Total . . . . . . . | 70 | 35 | 35 | 140 |
"A comedy worthy of the pen of Aristophanes is lately being played on the international capital market. Numerous foreign countries, from Spain to the Balkan states, from Russia to Argentina, Brazil and China, are openly or secretly coming into the big money market with demands, sometimes very persistent, for loans. The money market is not very bright at the moment and the political outlook is not promising. But not a single money market dares to refuse a foreign loan for fear that its neighbour may forestall it, consent to grant a loan and so secure some reciprocal service. In these international transactions the creditor nearly always manages to secure some extra benefit: a favourable clause in a commercial treaty, a coaling station, a contract to construct a harbour, a fat concession, or an order for guns.
"The principal spheres of investment of British capital are the British colonies, which are very large also in America (for example, Canada) not to mention Asia, etc. In this case, enormous exports of capital are bound up most closely with vast colonies, of the importance of which for imperialism we shall speak later. In the case of France the situation is different. French capital exports are invested mainly in Europe, primarily in Russia (at least ten billion francs). This is mainly loan capital, government loans and not investments in industrial undertakings. Unlike British, colonial imperialism, French imperialism might be termed usury imperialism. In the case of Germany, we have a third type; colonies are inconsiderable, and German capital invested abroad is divided most evenly between Europe and America.
The export of capital affects and greatly accelerates the development of capitalism in those countries to which it is exported. While, therefore, the export may tend a certain extent to arrest development in the capital exporting countries, it can only do so by expanding and deepening the further development of capitalism throughout the world.
The countries which export capital are nearly always able to obtain certain "advantages," the character of which throws light on the peculiarity of the epoch of finance capital and monopoly. The following passage, for instance, occurred in the Berlin review, Die Bank, for October 1913:
Finance capital has created the epoch of monopolies, and monopolies introduce everywhere monopolist principles: the utilization of "connections" for profitable transactions takes the place of competition on the open market. The most usual thing is to stipulate that part of the loan that is granted shall be spent on purchases in the creditor country, particularly on orders for war materials, or for ships, etc. In the course of the last two decades (1890-1910), France has very often resorted to this method. The export of capital abroad thus becomes a means for encouraging the export of commodities. In this connection, transactions between particularly big firms assume a form which, as Schilder** "mildly" puts it, "borders on corruption." Krupp in Germany, Schneider in France, Armstrong in England are instances of firms which have close connections with powerful banks and governments and cannot easily be "ignored" when a loan is being arranged. France, when granting loans to Russia, "squeezed" her in concluding the commercial treaty of September 16, 1905, in which she stipulated for certain concessions to run till 1917. She did the same thing when the Franco-Japanese commercial treaty was concluded on August 19, 1911. The tariff war between Austria and Serbia, which lasted with a seven months' interval, from 1906 to I911, was partly caused by competition between Austria and France for supplying Serbia with war materials. In January 1912, Paul Deschanel stated in the Chamber of Deputies that from 908 to 1911 French firms had supplied war materials to Serbia to the value of 45,000,000 francs.
A report from the Austro-Hungarian Consul at Sao-Paulo (Brazil) states: "The construction of the Brazilian railways is being carried out chiefly by French, Belgian, British and German capital. In the financial operations connected with the construction of these railways the countries involved stipulate for orders for the necessary railway materials."
Thus finance capital, literally; one might say, spreads its net over all countries of the world. An important role in this is played by banks founded in the colonies and by their branches. German imperialists look with envy at the "old" colonizing countries which have been particularly "successful" in providing for themselves in this respect. In 1904 Great Britain had 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 "only" 13 with 70 branches.* The American capitalists, in their turn, are jealous of the English and German: "In South America," they complained in 1915, "five German banks have forty branches and five English banks have seventy branches. . . . England and Germany have invested in Argentina, Brazil, and Uruguay in the last twenty five years approximately four thousand million dollars and as a result enjoy together 46 per cent of the total trade of these three countries."
The capital exporting countries have divided the world among themselves in the figurative sense of the term. But finance capital has led to the actual division of the world.
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