Imperialism and World Economy

Imperialism and World Economy

Chapter III: Organisation Forms of World Economy

1. ANARCHIC STRUCTURE OF WORLD ECONOMY. 2. INTERNATIONAL SYNDICATES AND CARTELS. 3. INTERNATIONAL TRUSTS. 4. INTERNATIONAL BANK SYNDICATES. 5. NATURE OF INTERNATIONAL, PURELY CAPITALIST ORGANISATIONS. 6. INTERNATIONALISATION OF ECONOMIC LIFE AND INTERNATIONALISATION OF CAPITALIST INTERESTS.

World economy in our times is characterised by its highly modern anarchic structure. In this respect the structure of world economy may be compared with the structure of "national" economies typical till the beginning of this century, when the organisation process, briskly coming to the fore in the last years of the nineteenth century, brought about substantial changes by considerably narrowing the hitherto unhampered "free play of economic forces." This anarchic structure of world capitalism is expressed in two facts: world industrial crises on the one hand, wars on the other.

It is a profound error to think, as the bourgeois economists do, that the elimination of free competition and its replacement by capitalist monopolies would do away with industrial crises. Such economists forget one "trifle," namely, that the economic activities of a "national" economy are now conducted with a view towards world economy. As to the latter, it is by no means an arithmetical total of "national" economies, just as a "national" economy is by no means an arithmetical total of individual economies within the boundaries of the state territory. In either case, there is a very substantial element supplementing all the others, namely, connections, reciprocal action, a specific medium which Rodbertus called "economic communication," without which there is no "real entity," no "system," no social economy, only isolated economic units. This is why, even if free competition were entirely eliminated within the boundaries of "national economies," crises would still continue, as there would remain the anarchically established connections between the "national" bodies, i. e., there would still remain the anarchic structure of world economy. 1)

What was said about crises is true also about wars. War in capitalist society is only one of the methods of capitalist competition, when the latter extends to the sphere of world economy. This is why war is an immanent law of a society producing goods under the pressure of the blind laws of a spontaneously developing world market, but it cannot be the law of a society that consciously regulates the process of production and distribution.

Still, notwithstanding the fact that modern world economy as a whole represents an anarchic structure, the process of organisation is making strides even here, expressing itself mainly in the growth of international syndicates, cartels, and trusts. We shall, first of all, undertake a general survey of these formations of modern times.

In the transport industry the largest cartels are (barring the changes brought about by the war): 1) the Sailing Shipowners Documentary Committee (English, German, Norwegian and Danish maritime societies); 2) the Internationale Segelschiffahrtkonvention (English, German, Danish, Swedish and Norwegian sail boats); 3) the Baltic and White Sea Conference embracing from 60 to 70 per cent of the total Baltic and White Sea tonnage (combining Germans, Frenchmen, Dutchmen, Englishmen, Spaniards, Belgians, Danes, Norwegians, Swedes, Russians, and Finns); 4) the Internationaler Küstenschiffahrtsverband, Altona; 5) the Nordatlantischer Dampferlinienverband (Germans, Americans, Belgians, Frenchmen, and Austrians); 6) the International Mercantile Marine Company, alias The Morgan Trust (mainly Americans, Englishmen, and Germans) which, by the end of 1911, owned 130 steamships with a gross tonnage of 1,158,270 tons. Outside of these cartels of a higher type, there exists a number of important agreements as to the regulation of freight rates, rebates, etc.

In the mining and metallurgic industries: 1) the Internationales Trägerkartell (steel syndicates of Germany, Belgium and France); the Internationales Schienenkartell (German, English, French, Belgian, American, Spanish, Italian, Austrian, and Russian rail works); 3) the Internationale Stahlkonven­tion (the American Steel Trust, the Bethlehem Steel Company, and the Krupp firm); 4) the Internationale Bleikonvention (German, Australian, Belgian, American, Mexican and English lead manufacturers); 5) the Deutsch‑Oesterreichischer Stahlgussverband; 6) the Deutsch­-Englische Ferromanganeisenkonvention; 7) the Internationale Vereinigung von Ferrasiliziumwerke (Norwegians, Swiss, Tyrolians, Bosnians, Savoyians, and Germans); 8) the Internationales Metallplattensyndikat (Germans and Austrians); 9)the Vereinigung der Zinkplattenfabrikanten (Englishmen and Americans; very influential in the world market); 10) the Internationale Zinkkonvention (Germans, Belgians, Frenchmen, Italians, Spaniards, Englishmen, and Americans; controls 92 per cent of the European output); 11) Internationaler Zinkhüttenverband (Germans, Frenchmen, Belgians, Englishmen); 12) Internationales Drahtgeflechtekartell (Germans, Belgians, Frenchmen, Englishmen); 13) Internationales Abkommen der Kupferdrahtziehereien; 14) Deutsch‑Englische Schraubenkonvention; 15) Internationales Emaillekartell (Germans, Austro­-Hungarians, Frenchmen, Swiss, Italians); 16) Internationales Turbinensyndikat (mainly Germans and Swiss); l7) Vereinigte Dampfturbinengesellschaft (German A‑E‑G, American General Electric Co. and other firms); 18) Automobiltrust (Motor Trade Association and nearly all the outstanding European automobile enterprises); 19) Russisch‑Deutsch‑Oesterreichisches Syndikat für landwirtschaftliche Geräte; 20) Internationale Vereinigung von Eisenwarenhändlerverbänden (Germans, Englishmen, Frenchmen, Austro‑Hungarians, Swiss, Belgians); 21) Internationaler Verband der Korsettschliessen and Federnfabriken (nearly all large factories, in existence).

The stone, clay, etc,, industry has six large international cartels.

In the electrical industry, as we have noted above, the process of the internationalisation of production finds its most salient expression. There are several very large international agreements in existence. The largest are: 1) an agreement between the German A‑E‑G, the American General Electric Company, and the British‑French Thomson Houston Company, the organisation having a network of enterprises spread over every part of the world; 2) Internationales Galvanosteginsyndikat; 3) Verkaufstelle Vereinigter Glühlampenfabriken (Germans, Austro­Hungarians, Swedes, Dutch, Italians, Swiss); there are, besides, numerous special agreements between banks concerning the financing of electric enterprises etc.

In the chemical industry, international cartelisation has become pronounced, mainly in a number of particular fields. The more important are: 1) Internationales Chlorkalk‑kartell (Germans, Frenchmen, Belgians, Englishmen, Americans); 2) Internationales Leimkartell (glue factories in Austria‑Hungary, Germany, Holland, Belgium, Sweden, Denmark, and Italy, sales office in London); 3) Internationales Boraxkartell (Germans, Americans, Frenchmen, Austro‑Hungarians, Englishmen); 4) Internationaler Verband der Seidenfärbereien (German, Swiss, French, Italian, Austrian and American associations of dyers); 5) Internationales Karbidsyndikat (all European); 6) Internationales Pulverkartell; 7) Deutsch‑Oesterreichischer Superfosphatkartell; 8) Kartell der Belgisch‑Holländischen Oleinproduzenten; 9) Internationale Verkaufsvereinigung Stickstoffdünger (German, Norwegian, Italian, and Swiss factories of nitrate fertiliser); 10) Internationales Kerosinkartell (Standard Oil Company and Russian firms); 11) Verband Deutsch‑Oesterreichisch­Italienischer Kipsgerber and Kipshändler; 12) Internationales Salpetersyndikat; 13) Internationales Koalinverkaufsyndikat (Austro‑Germans); 14) Europäische Petroleumunion (Germans, Englishmen, Swiss, Dutch, Belgians, Austrians, Danes, Americans, East‑Asiatic oil producers).

In the textile industry the international agreements concern themselves mainly with special branches of production: 1) the International Federation of Master Cotton Spinners and Manufacturers Association (representing the continental‑European and American industry); 2) Deutsch‑Oesterreichisches Kravatenstoffkartell; 3) Internationales Samtindustriekartell (all the German and French velvet factories); 4) Kunstseide Verkaufskontor (German and Belgian factories of artificial silk); 5) International Cotton Mills Corporation (U. S. A. and the rest of America); 6) Konvention der deutschen and schweizerischen Seidencachenezfabrikanten; 7) Verband der deutsch‑schweizerischen Cachenez‑ and Kravattenfabrikanten; 8) Oesterreichisch‑Deutsches Jutekartell; 9) Internationaler Verband der Kratzenfabriken (Germans, Luxemburgians, Belgians, Dutch, Austro‑Hungarians, Swedes, Norwegians, Danes, Balkanites); 10) Internationale Nähseidekonvention (Austrian, Belgian, Russian, Spanish and English enterprises); 11) Internationale Vereinigung der Flachs‑ and Werggarnspinner (nearly all the large flax spinners of Europe); 12) Internationales Kartell der Schappenspinner.

In the glass and china industry, the largest international organisation is the Europäischer Verband der Flaschenfabrikanten (embracing nearly all the European countries); also a number of large glass and china cartels.

The paper industry numbers seven large international cartels.

Ten other agreements concerning six different industries (rubber, cabinetmaking, cork, cocoa, etc.) are also known to exist. 2)

Besides the above mentioned cartels, there exist hundreds of international trusts (mergers and controlling organisations). We shall mention here only the most outstanding, i.e., such as have the greatest economic weight in the world market.

Such a trust is the Standard Oil Company of New Jersey which, in 1910, owned the shares of 62 companies (including the Anglo‑American Oil Company, the Deutsch‑Amerikanische Petroleumgesellschaft, and the Romana‑Americana) and was connected with a very large number of enterprises and companies (Dutch, German, French, Swedish, Italian, Russian, Swiss, etc.). 3) The trust "controls" the Amalgamated Copper Company which is intent on acquiring a world monopoly in the production of copper. Another large trust is the United States Steel Corporation, the largest "controlling company" in the world. Of the other trusts, the outstanding are: Reisemühlen und Handelsaktiengesellschaft in Barmen, with foreign participation equalling 6,039,344 marks; 4) the Internationale Bohrgesellschaft; the Nobel Trust Company; a number of international trusts in the petroleum industry; the banana trust organised by the Boston Fruit Company and the Tropical Trading and Transport Company; the packing trust; the sewing thread trust with the English firm of J. and P. Coats, Ltd., at its head; the Société Centrale de la Dynamite; Compagnie Générale de la Conduits d'Eau (Lüttich) which "controls" enterprises in Utrecht, Barcelona, Paris, Naples, Charleroi, Vienna; the Trust metallurgique beige‑franqais, etc., etc. 5)

Behind all these cartels and trusts, as a rule, stand the enterprises that finance them, i.e., primarily the banks. The internationalisation process whose most primitive form is the exchange of commodities and whose highest organisational stage is the international trust, has also called into being a very considerable internationalisation of banking capital in so far as the latter is transformed into industrial capital (by financing industrial enterprises), and in so far as it thus forms a special category: finance capital.

It is finance capital that appears to be the all‑pervading form of capital, that form which, like nature, suffers from a horror vacui , since it rushes to fill every "vacuum," whether in a "tropical," "sub­tropical," or "polar" region, if only profits flow in sufficient quantities. We quote below a number of examples of gigantic international banking trusts to illustrate the friendly "mutual aid" given by the large "national" banks to one another.

In 1911, a finance trust, the Société financiere des valeurs américaines, was organised at Brussels with the aim of financing American enterprises. It included the Deutsche Bank and the firm of Warburg Company in Hamburg, the Société Générale in Brussels, the Banque de Bruxelles, the Banque de Paris et de Pays‑Bas, the Société Générale pour favoriser l'industrie nationale in Paris, the Société Francais de banques et de dépôts, the Banque Francaise pour le Commerce et l'Industrie, Kuhn‑Loeb Company, New York, etc., etc.‑all of them belonging to the largest banks of the world. 6) The Deutsche Bank that forms part of that "finance trust," organises, together with the Schweizerische Kreditanstalt and the SpeyerEllissen firm, the Aktiengesellschaft für überseeische Bauunternehmungen for the purpose of organising building enterprises on the other side of the ocean; it organises centres for the sale of kerosene in several countries; it forms an alliance with the Russian firm of Nobel; it participates in the European Kerosene Union. 7) Not so long ago, a banking trust (Consortium Constantinopel) was organised in Brussels for the purpose of financing enterprises in Constantinople. It includes the Deutsche Bank, the Deutsche Orientbank (connected with the former), the Dresdner Bank, the Schaffhausenscher Bankverein, the Nationalbank, the Société Générale in Paris, the Banque de Paris, the Comptoir National, the Schweizerische Kreditanstalt, and the Bank für elektrische Unternehmungen. 8) A special railroad bank is organised in Belgium (the Banque belge de chemins de fer) with the aid of the Banque de Paris et de Pays‑Bas, the Wiener Bankverein, the Schweizerische Kreditanstalt, the Société Générale des chemins de fer économiques, the Deutsche Bank, the Dresdner Bank, etc., i.e., with the aid of an international banking trust. One more example: the Russian Metal Syndicate was aided by four groups of "national" banks‑the Russian group (Asov Commerce Bank, St. Petersburg International Commerce Bank, Russian Foreign Commerce Bank, Russo‑Asiatic Bank, and Commerce Bank in Warsaw); the French group (Credit Lyonnais, Banque de Paris et de Pays‑Bas, Société Générale the German group (Deutsche Bank, Bank für Handel and Industrie, and Dresdner Bank); and the Belgian group (Credit General à Liege, Société Générale de Belgique, Nagelmärkers fils à Liege). 9)

It would be a great error to think that all these examples are accidental exceptions. Economic life is teeming with them. Colonial enterprises, and the export of capital to other continents, railway construction and state loans, city railways and ammunition firms, gold mines and rubber plantations, all are intrinsically connected with the activities of international banking trusts. International economic relations are extended through countless threads; they pass through thousands of cross‑points; they are intertwined in thousands of groups, finally converging in the agreements of the largest world banks which have stretched out their tentacles over the entire globe. World finance capitalism and the internationally organised domination of the banks are one of the undeniable facts of economic reality.

On the other hand, one must not overestimate the significance of international organisations. Their specific weight compared with the immensity of the economic life of world capitalism is by no means as great as would appear at the first glance. Many of them ( i.e. , of the syndicates and cartels) are only agreements concerning the division of markets Rayonierungskartelle ); in a series of large subdivisions of social economy they embrace only very specific branches of production (such as the bottle syndicate which is one of the strongest); many of them are of a highly unstable nature. Only those international agreements which are based on a natural monopoly are possessed of a greater degree of stability. Still, there is a tendency towards a continuous growth of international formations, and this growth cannot be ignored when analysing the development of modern world economy. 10)

We have pursued the main tendencies in the growth of world economy from the exchange of commodities up to the activities of international banking syndicates. This process in all its ramified forms is the process of the internationalisation of economic life; the process of bringing separate geographic points of economic development closer to each other; the process of reducing capitalist relations to one level; the process of the growing contrast on the one hand between concentrated property in the hands of the world capitalist class, and on the other, the world proletariat. It does not follow from this, however, that social progress has already reached a stage where "national" states can co‑exist harmoniously. For the process of the internationalisation of economic life is by no means identical with the process of the internationalisation of capital interests. A Hungarian economist was perfectly right when he remarked concerning the works of the English pacifist, Norman Angell, that "he" ( i.e. , "forgets only one thing: that there are classes both in Germany and England, and that the thing that may be superfluous, useless, even harmful, for the people as a whole, can be of very great benefit ( sehr gewinnbringend sein kann )for individual groups (large financiers, cartels, bureaucracy, etc.)." 11) This proposition can, of course, be applied to all states, for their class structure is beyond any doubt, at least from a purely scientific point of view. This is why only those who do not see the contradictions in capitalist development, who good‑naturedly assume the internationalisation of economic life to be an Internationale der Tatsachen, i.e., those who assume anarchic internationalisation to be organised internationalisation‑can hope for the possibility of reconciling the "national" capitalist groups in the "higher unity" of peaceful capitalism. In reality things take place in a much more complicated way than appears to the opportunist optimists. The process of the internationalisation of economic life can and does sharpen, to a high degree, the conflict of interests among the various "national" groups of the bourgeoisie. Indeed, the growth of international commodity exchange is by no means connected with the growth of "solidarity" between the exchanging groups. On the contrary, it can be accompanied by the growth of the most desperate competition, by a life and death struggle. The same is true of the export of capital. "Community of interests" is not always created in this field. Competitive struggle for the spheres of capital investment may here, too, reach a highly acute state. There is only one case in which we can say with assurance that solidarity of interests is created. This is the case of growing "participation" and financing, i.e., when, due to the common ownership of securities, the class of capitalists of various countries possesses collective property in one and the same object. Here we actually have before us the formation of a golden international; 12) there is apparent here, not a simple similarity or, as one is wont to say at present, a "parallelism" of interests; there is actual unity here; but the course of economic development creates, parallel to this process, a reverse tendency towards the nationalisation of capitalist interests. And human society as a whole, placed under the iron heel of world capital, pays tribute to this contradiction‑in unbelievable torment, blood, and filth.

The perspectives of development can be pointed out only after analysing all the main tendencies of capitalism. And since the internationalisation of capitalist interests expresses only one side of the internationalisation of economic life, it is necessary to review also its other side, namely, that process of the nationalisation of capitalist interests which most strikingly expresses the anarchy of capitalist competition within the boundaries of world economy, a process that leads to the greatest convulsions and catastrophes, to the greatest waste of human energy, and most forcefully raises the problem of establishing new forms of social life.

We are thus confronted with the task of analysing the process of the nationalisation of capital.

1) This is beginning to dawn even upon bourgeois writers. Thus Mr. Goldstein says: "That the cartels and trusts are in no position to eliminate crises, is seen, among other things, from the fact that the steel trust, in whose hands, including affiliated enterprises, something like 90 per cent of the U. S. production of steel were concentrated, utilised by the end of the first quarter of 1908 only one‑half of the production capacity of its plants, etc." (I. M. Goldstein: Syndicates, Trusts, and Modern Economic Policies, second edition, Moscow, 1912, p. 5, footnote). Cf. also Tugan Baranovsky: Industrial Crises.

2) The list of international cartels is here reproduced from the above quoted book by Harms (p. 254 ff.) . We quote this list as well as the list of international trusts and bank syndicates because, as far as we know, there is no Russian literature dealing with the question.

3) Liefmann, IX., p. 249 ff .

4) Ibid. , p. 275.

5) Kobatsch, l.c. ; Liefmann, l.c. ; Harms, l.c.

6) Liefmann, l.c. p. 174.

7) Liefmann, l.c. pp. 456-458.

8) Ibid ., pp. 497-498.

9) Zagorsky: Syndicates and Trusts, p. 230. We mention only private international economic agreements. It is assumed that state agreements, playing an immense economic part (like the International Postal Alliance, the railroad agreements, etc.), are known to the reader.

10) Sartorius von Waltershausen puts a very low estimate on the part played by international organisations. Compare l.c. , p. 100: "That there should be created, and there should exist, international companies with centralised [ einheitlicher ] management of production appears unlikely. But, of course, one may expect that there would be agreements between large national companies concerning the distribution of the selling markets." The opposite point of view is maintained by Harms.

11) Erwin Szabo: "Krieg und Wirtschaftsverfassung," in Archiv für Sozialsvissenschaft und Sozialpolitik, 39. Bd., 3. Heft, pp. 647‑648.

12) How the ideologists of the present‑day bourgeoisie view this golden international (we do not speak, of course, of the contradistinction between the "top" and the "bottom") may be seen from the following statement by Sartorius: "The golden 'international' can never be an ideal for a man who has a fatherland, and who believes that in that fatherland are sunk the roots of his existence" l.c., p. 14). This in turn shows the comparative weakness of the process of the internationalisation of capitalist interests.

Contents | Chapter 2 | Chapter 4

Bukharin Archive

The Inner Structure of "National Economies" and the Tariff Policy

N.I. Bukharin: Imperialism and World Economy

Chapter IV: The Inner Structure of "National Economics" and the Tariff Policy

1. "NATIONAL ECONOMIES" AS INTERSECTIONS OF WORLD ECONOMIC RELATIONS. 2. GROWTH OF MONOPOLY ORGANISATIONS. CARTELS AND TRUSTS. 3. VERTICAL CONCENTRATION. COMBINED ENTERPRISES. 4. ROLE OF THE BANKS. TRANSFORMATION OF CAPITAL INTO FINANCE CAPITAL. 5. BANKS AND VERTICAL CONCENTRATION. 6. STATE AND COMMUNAL ENTERPRISES. 7. THE SYSTEM AS A WHOLE. 8. THE TARIFF POLICY OF FINANCE CAPITAL, AND CAPITALIST EXPANSION.

World economy, as we have seen above, represents a complex network of economic connections of the most diverse nature; the basis of this are production relations on a world scale. Economic connections uniting a great number of individual economies are found to become more numerous and more frequent as we proceed, within the framework of world economy, to analyse "national" economies, i.e. , economic connections existing within the boundaries of individual states. There is nothing mysterious about this; we must not attribute that fact to an alleged creative role of the "state principle" that is supposed to create from within itself special forms of national economic existence; neither is there a predestined harmony between society and state. The matter has a much simpler explanation. The fact is that the very foundation of modern states as definite political entities was caused by economic needs and requirements. The state grew on the economic foundation; it was only an expression of economic connections; state ties appeared only as an expression of economic ties. Like all living forms, "national economy" was, and is, engaged in a continuous process of internal regeneration; molecular movements going on parallel with the growth of productive forces, were continually changing the position of individual "national" economic bodies in their relation to each other, i.e. , they influenced the interrelations of the individual parts of the growing world economy. Our time produces highly significant relations. The destruction, from top to bottom, of old, conservative, economic forms that was begun with the initial stages of capitalism, has triumphed all along the line. At the same time, however, this "organic" elimination of weak competitors inside the framework of "national economies" (the ruin of artisanship, the disappearance of intermediary forms, the growth of large‑scale production, etc.) is now being superseded by the "critical" period of a sharpening struggle among stupendous opponents on the world market. The causes of this phenomenon must be sought first of all in the internal changes that have taken place in the structure of "national capitalisms," causing a revolution in their mutual relations.

Those changes appear, first of all, as the formation and the unusually rapid spread of capitalist monopoly organisations: cartels, syndicates, trusts, bank syndicates. 1) We have seen above how strong this process is in the international sphere. It is immeasurably greater within the framework of "national economies." As we shall see below, the "national" carteling of industry serves as one of the most potent factors making for the national interdependence of capital.

The process of the formation of capitalist monopolies is, logically and historically, a continuation of the process of concentration and centralisation of capital. Just as the free competition of artisans, arising over the bones of feudal monopoly, led to the accumulation of the means of productions in the hands of the class of capitalists as their monopoly possession, so free competition inside of the class of capitalists is being more and more limited by restrictions and by the formation of giant economies monopolising the entire "national" market. Such giant economies must by no means be considered "abnormal" or "artificial" phenomena springing up in consequence of state aid like tariffs, freight rates, premiums, subsidies, or governmental orders, etc. True, all these "causes" have materially accelerated the process of monopolisation, but they have never been, and are not, its prime condition. What is really a conditio sine qua non is a certain degree of concentration of production. This is why, generally speaking, monopoly organisations are the strongest where productive forces are most developed. A particularly important part was played in this respect by joint stock companies, a form that has immensely facilitated the investment of capital in production and has created enterprises of hitherto unknown dimensions. It is therefore most natural that leadership in the cartel movement belongs to the two countries that have forged ahead with feverish rapidity to the first places in the world market, namely, the United States and Germany.

The United States represents a classic example of modern economic development, and it is here that the most centralised form of monopoly organisations, the "trusts," have become deeply rooted. The following table gives a clear idea of the tremendous economic power of the trusts‑of the largest trusts in particular‑as well as of their growth.

According to Moody, the growth of trusts between 1904 and 1908 is expressed in the figures in the table below.

1904 1908

Groups of trusts No. of companies Value of Stocks and Bonds No. of companies Value of Stocks and Bonds

Seven Largest Industrial Trusts 1,524 2,662,752,100 1,638 2,708,438,754

Smaller Industrial Trusts 3,426 4,055,039,433 5,038 8,243,175,000

Trusts in process of Reorganisation 282 528,551,000 .... ....

Total 5,232 7,246,342,533 6,676 10,951,613,754

Concession Enterprises 1,336 3,735,456,071 2,599 7,789,393,600

Groups of largest Railroads 1,040 9,397,363,907 745 12,931,154,010

Total 7,608 20,379,162,511 10,020 31,672,161,354 2)

According to Poor's Manual of Corporations and Poor's Manual of Railroads for 1910 the total equals 333 billion dollars. 3) By 1910 the share of the trusts in "'national" production was already very large. They produced 50 per cent of the textiles, 54 per cent of the glassware, 60 per cent of the cotton and printed goods, 62 per gent of the foodstuffs, 72 per cent of the alcoholic beverages, 77 per cent of the metal products (exclusive of iron and steel), 81 per cent of the chemicals, 84 per cent of the iron and steel. 4) Since then their share in the national production has grown considerably, for the process of concentration and centralisation of capital in the United States proceeds with magic rapidity.

Only a few students of the most recent development of the finance organisation of large‑scale production and its commercial branches can have an idea of the gigantic concentration, and of its power over combined and differentiated large‑scale enterprises, which often include productive forces reaching beyond the boundaries of an individual national economy. 5)

Within the framework of the present study it is impossible even to enumerate the chief trusts operating in the various countries. Let it be noted only that at the head of all of them are the two most colossal trusts, the Standard Oil Company and the United States Steel Corporation, respectively representing the two financial groups of Rockefeller and Morgan.

The movement of big capital in Germany proceeds along identical lines. By 1905 there were, according to official statistics, 385 cartels in the most diverse branches of production. 6) The well‑known theoretician and leader of the cartel movement in Germany, Dr. Tschierschky, estimates the number of cartels in Germany as between 550 and 600. 7) The greatest among them are: the Rhine‑Westphalian Coal Syndicate (Rheinisch‑Westfälisches Kohlensyndikat) and the Steel Syndicate (Stahlwerksverband). According to Raffalovich, the former produced in 1909, in the Dortsmund region, 85 million tons of coal, whereas the production of all the "outsiders" amounted to 4,200,000 tons only (4.9 per cent). 8) By January, 1913, the production of syndicate coal amounted to 92.6 per cent of the total production in the Ruhr region and 54 per cent of the total national production. By that time the steel syndicate had increased its production to 43‑44 per cent of the national production. The sugar refining trust, embracing 47 enterprises, produces a very large share of the total output (70 per cent of the sugar consumed in the country, and 80 per cent of the sugar exported abroad). 9) The electric trust (an Interessengemeinschaft between two trusts: the Siemens‑Schuckert and the A‑E‑G) control 40 per cent of all the power produced.

The monopoly organisations in other countries are less formidable, but taken in absolute numbers, without comparison with the United States or Germany, the syndication process is considerable everywhere.

France numbers a considerable array of syndicates in the metallurgic, sugar, glass, paper, naphtha, chemical, textile, coal, etc., industries. Of particular importance are Le Comptoir de Longway which produces almost all the cast iron manufactured in France; the sugar syndicate, which dominates the market almost completely; the Société Gén6érale des glaces de St. Gobain, which also occupies an almost absolute monopoly situation, etc; a series of agricultural syndicates, close to which are the agricultural societies, 10) must also be noted, as well as the large combinations in the transportation industry, namely, the three steamship companies (Compagnie Générale Transatlantique, Compagnie des Messageries Maritimes, and Compagnie des Chargeurs Réunis), which embrace 41.25 per cent of the entire merchant marine of France. 11)

In England, where, despite the great concentration of industry, the monopoly movement for a long while remained very weak due to a number of reasons, the trustification of industry ("amalgamations," "associations," and "investment trusts") has made tremendous strides in the very last few years. Old peculiarities begin to recede, to become a thing of the past, both as regards the labour movement in England and as regards the traditional English free trade policy (as we shall see below, free competition, which is only another name for free trade, is being relegated more and more to the background in the realm of economic foreign policy). Only ignorance can at present refer to England as a representative of an entirely different economic type. Here are a few cases that may serve as an example: the Association of Portland Cement Manufacturers, producing 89 per cent of the national output; the steel trusts; the alcohol trusts; the wallpaper trusts producing 98 per cent of all the wallpaper and other decorative materials; the cable trusts (the Cablemakers' Association, producing about 90 per cent of the national output); the salt trust (Salt Union, about 90 per cent); the Fine Cotton Spinners' and Doublers' Trust (practically controlling the entire production of England); the dyers' and bleachers' trust (Bleachers' Association and Dyers' Association, about 90 per cent); the Imperial Tobacco Company (about one‑half of the national production), etc. 12)

In Austria we find among the large cartels: the coal syndicate of Bohemia (with 90 per cent of all the production of Austria); the brick syndicate with a yearly output amounting to 400 million crowns (the production of outsiders amounting only to 40 million crowns); the iron syndicate; the naphtha syndicate (in Galicia, with 40 per cent of the national output); the sugar, glass, paper, textiles, and other syndicates.

Even in such a backward country as Russia, with such a paucity of capital, the number of higher type syndicates and trusts, according to Mr. Goldstein, exceeds 100. There are, besides, a number of local agreements of a less developed type. Let us note the largest. 13) In the coal industry the Produgol Trust (producing 60 per cent of the coal dug in the Don area); 19 syndicates in the iron industry, among which the most prominent are Prodameta (iron implements trusts, controlling SS‑93 per cent of national production), the Krovlia (sheet iron trust, with 60 per cent of the national output), and Prodvagon (railroad car trust, embracing 14 out of the 16 car construction plants); in the oil industry almost the entire production is concentrated in the hands of four companies, mutually interlocked; noteworthy are also the copper syndicate (90 per cent), the sugar syndicate (100 per cent), the textile manufacturers' agreements, the tobacco trust (57‑58 per cent), the match syndicate, etc.

The syndicates show a high degree of development in Belgium; but even such young countries as Japan have also entered the road of building capitalist monopolies. The old production forms of capitalism have thus undergone a radical change. According to F. Laur's figures out of 500 billion francs invested in the industrial enterprises of all the countries of the world, as 255 billions, i.e., almost one‑half, aye invested in production organised in cartels and trusts . (This capital is distributed in the various countries as follows: United States, 200 billion francs; Germany, 50 billion francs; France, 30 billion francs; Austria‑Hungary, 25 billion francs, etc.‑all these figures being estimated below the actual ones). 14) This indicates a complete transformation of the old interrelation of forces inside every country, which could not fail to entail radical changes in the interrelation of the countries themselves.

The process, however, is not limited to individual branches of production. There is going on a continuous process of binding together the various branches of production, a process of transforming them into one single organisation. This expresses itself, first of all, in the form of combined enterprises, i.e. , enterprises combining the production of raw materials and manufactured goods, the production of manufactured goods with that of unfinished products, etc., which process can and does absorb the most diverse branches of production, since under the prevailing division of labour in our times every branch depends upon the other to a larger or lesser degree, directly or indirectly. For instance, when a trust produces outside of its main product also a by‑product, it shows a tendency to monopolise this latter branch of production, which in turn serves as a stimulus to monopolising the production of goods used as substitutes for the by‑product; then comes the tendency to monopolise the production of raw materials used for the production of the substitute, and so on and so forth. Thus combinations are created which, at first glance, seem astounding, like iron and cement, oil and glucose, etc. 15) This vertical concentration and centralisation of production, in contradistinction to the horizontal centralisation which is going on within one branch of production, signifies, on the one hand, a diminution of the social division of labour, since it combines in one enterprise the labour that was previously divided among several enterprises; on the other hand, it stimulates the division of labour inside of the new production unit. The entire process, taken on a social scale, tends to turn the entire "national" economy into a single combined enterprise with an organisation connection between all the branches of production. The same process is going on with great rapidity in another way: banking capital penetrates industry, and capital turns into finance capital.

We have seen in the preceding chapters what tremendous significance is attached to participation in and financing of industrial enterprises. The latter is one of the functions of modern banks.

An increasingly large section of industrial capital does not belong to the industrialists who apply it. The right to manipulate the capital is obtained by them only through the bank which, in relation to them, appears as the owner of that capital. On the other hand, the bank is compelled to place an ever growing part of its capital in industry. In this way the bank becomes to an ever increasing degree an industrial capitalist. Bank capital, i.e. , capital in money form, which has thus been in reality transformed into industrial capital, I call finance capital . 16)

Thus by means of various forms of credit, by owning stocks and bonds, and by directly promoting enterprises, banking capital appears in the role of an organiser of industry. This organisation of the combined production of a whole country is the stronger, the greater; on the one hand, the concentration of industry, on the other, the concentration of banking. The latter has of late assumed colossal proportions. Here are a few examples. In Germany an actual monopoly of banking is in the hands of six banks: the Deutsche Bank, the Diskontogesellschaft, the Darmstädter Bank, the Dresdner Bank, the Berliner Handelsgesellschaft, and the Schaffhausenscher Bankverein; the capital of those banks amounted in 1910 to 1,122.6 million marks. 17) The growth of the power of those banks may be seen from the growth of the number of their institutions inside of Germany (counting the main banks and their branches, deposit banks and currency exchange offices, also their "participation" in the German stock company banks): in 1895, 42; in 1896, 48; in 1900, So; in 1902, 127; in 1905, 194; in 1911, 450. 18) Within 16 years the number of those institutions grew eleven times.

In the United States there are only two banks of such importance: The National City Bank (the Rockefeller firm) and the National Bank of Commerce (the Morgan firm). Those two banks hold sway over countless industrial undertakings and banks, intertwined in all sorts of ways. "The size of the bank operations of the Rockefeller and Morgan groups may be approximately judged by the fact that, in 1908, the first group counted among its clients, and held reserves of, 3,350, and the latter of 2,757, national, state and other banks." No new trust can be founded without the aid of these banks, they being a "monopoly of monopoly making. 19)

Corresponding to this unique economic tie between the various production branches and the banks, is a special form of higher management of both. As a matter of fact, the representatives of the industrialists manage the banks, and vice versa. Jeidels is authority for the statement that, in 1903, the six above mentioned German banks held 751 seats in the supervising councils of the industrial stock companies. 20) Conversely, there were (in December, 1910) 51 representatives of industry in the supervising councils of the banks. 21)

As to America, the following fact is highly characteristic. From a list submitted to the Senate during the debate over the bill for the improvement of the banking business (La Follette's commission in 1908), it was evident that 89 persons held over 2,000 directors' posts in various industrial, transportation, and other companies, all of which companies were directly or indirectly controlled by Morgan and Rockefeller.

Mention must be made here also of the important part played by state and communal enterprises, which enter into the general system of "national economy." Among state enterprises we find, first of all, mining (in Germany, e.g., out of 309 coal mines with an output of 149 million tons, 27 mines with an output of 20.5 million tons belonged to the state in agog; the total value of state production amounted to 235 million marks; salt mines and others also belong to this category; the gross income from all state enterprises of Germany in 1910 amounted to 349 million marks, while the net income was 25 million marks); 22) next to mining are state railroads (only in England, and only prior to the war, were the railroads exclusively in the hands of private owners); then the post office, the telegraph, etc., also forestry. Among communal enterprises of great economical importance are mainly the water system, the gas system, and the electric constructions, with all their ramifications. 23) The powerful state banks also form part of this system. The interrelation between those "public" enterprises and the enterprises of a purely private character assumes various forms; the economic connections, in general, are numerous and variegated, and credit is not the least among them. Very close relations arise on the basis of the so‑called mixed system ( gemischte Unternehmungen ) where a certain enterprise is composed of both "public" and private elements (participation of large‑scale, usually monopolistic, firms)‑a phenomenon not infrequent in the realm of communal economy. The example of the German Empire Bank ( Reichsbank ) is of particular interest. This bank, whose part in the economic life of Germany is tremendous, appears so closely connected with "private economy" that there is an unsettled dispute going on as to whether it is a stock company or a state institution, whether it is subject to the laws governing private or public undertakings. 24)

All parts of this considerably organised system, cartels, banks, state enterprises, are in the process of growing together; the process is becoming ever faster with the growth of capitalist concentration; the formation of cartels and combines creates forthwith a community of interest among the financing banks; on the other hand, banks are interested in checking competition between enterprises financed by them; similarly, every understanding between the banks helps to tie together the industrial groups; state enterprises also become ever more dependent upon large‑scale financial‑industrial formations, and vice versa. Thus various spheres of the concentration and organisation process stimulate each other, creating a very strong tendency towards transforming the entire national economy into one gigantic combined enterprise under the tutelage of the financial kings and the capitalist state, an enterprise which monopolises the national market and forms the prerequisite for organised production on a higher noncapitalist level .

It follows that world capitalism, the world system of production, assumes in our times the following aspect: a few consolidated, organised economic bodies ("the great civilised powers") on the one hand, and a periphery of undeveloped countries with a semi‑agrarian or agrarian system on the other. The organisation process (which, parenthetically speaking, is by no means the aim or the motive power of the capitalist gentlemen, as their ideologists assert, but is the objective result of their seeking to obtain a maximum of profit) tends to overstep the "national" boundaries. But it finds very substantial obstacles on this road. First, it is much easier to overcome competition on a "national" scale than on a world scale (international agreements usually arise on the basis of already existing "national" monopolies); second, the existing differences of economic structure and consequently of production‑costs make agreements disadvantageous for the advanced "national" groups; third, the ties of unity with the state and its boundaries are in themselves an ever growing monopoly which guarantees additional profits. Among the factors of the latter category, let us first of all turn our attention to the tariff policy.

The character of the tariff policy has undergone a total transformation. Old‑time customs duties aimed at defence; present-day customs duties aim at aggression; old‑time tariffs were secured for commodities whose production was so little developed at home that they could not stand competition on the world market; in our days "protection" is accorded to those branches of production which are most capable of withstanding competition.

Friedrich List, that apostle of protectionism, in his National System of Political Economy , dealt with educational customs duties, looking upon them as upon a temporary measure.

We shall speak here [he says] of tariff legislation only as a means to educate industry.... Protectionist measures can be justified only as a means of encouraging and protecting the home manufacturing power, and only among those nations which are...called to secure for themselves a position equal to that of the foremost agricultural, manufacturing, and trading nations, the great maritime and continental powers. 25)

Nothing of the kind exists at present despite the assertions of some bourgeois scholars. Present‑day "high protectionism" is nothing but the economic policy of the cartels as formulated by the state; present‑day customs duties are cartel duties, i.e. , they are a means in the hands of the cartels for obtaining additional profit, for it is quite obvious that if competition is eliminated or reduced to a minimum in the home market, the "producers" can raise the prices inside the home market, adding an increment equal to the tariff. This additional profit makes it possible to sell commodities on the world market below the cost of production, to practice dumping , which is the peculiar export policy of the cartels. This explains the apparently strange phenomenon that present‑day tariffs "protect" also export industries. Already Engels saw clearly the connection existing between the growth of cartels on the one hand and modern tariffs with their specific characteristics on the other.

The fact [he says] that the rapidly and enormously growing productive forces grow beyond the control of the laws of the capitalist mode of exchanging commodities, inside of which they are supposed to move, impresses itself nowadays more and more even on the minds of the capitalists. This is shown especially by two symptoms. First, by the new and general mania for a protective tariff, which differs from the old protectionism especially by the fact that now the articles which are capable of being exported are the best protected. In the second place, it is shown by the trusts of manufacturers of whole spheres of production. 26)

It was in our time that a gigantic stride forward was made in this direction. Consolidated industry, led by the heavy industries, appears as the most ardent advocate of a high tariff system, for the higher the tariff the greater is the additional profit, the easier is it to conquer new markets, and the greater is the general volume of profits obtained. The limit is reached only when the demand shrinks to such an extent that the loss is no longer compensated by the high prices. Inside of these limitations, however, the tendency to higher tariffs is an undisputed fact.

When we now survey world economy as a whole, there appears before our eyes the following picture. Cartel tariffs and the dumping system practiced by the foremost countries provoke resistance on the part of the backward countries which raise their defencive tariffs; 27) on the other hand the raising of tariffs by the backward countries serves as a further stimulus to raise the cartel duties that make dumping easier. Needless to say that the same action and counteraction take place both among the foremost countries in relation to each other and among backward countries in their mutual relations. This endless screw, perpetually applied by the growth of cartel organisations, has called forth the "tariff mania" of which Engels spoke, and which has grown even more pronounced in our days.

From the end of the seventies of the last century, there can be observed in all countries distinguished by modern development a turn from free trade to a tariff system. The latter, rapidly evolving from a system supposed to "educate" industry into a system safeguarding the cartels, finally becomes the high protectionism of our days.

In Germany this turn takes a definite form with the introduction of the tariff of 1879. Since then we see in Germany a continuous growth of tariff duties (compare, for instance, the tariff of 1902 with the later tariffs); in Austria‑Hungary, the turn dates back to 1878; the subsequent tariffs reveal a similar rising tendency (particularly the tariffs of 1882, 1887, 1906, etc.); in France, a decisive turn towards protectionism was taken by the general tariff of 1881 which raised the duties on industrial imports 24 per cent; mention must be made also of the high protectionist tariff of 1892 (with duties on manufactured goods amounting to 69 per cent ad valorem, and on agricultural goods, 25 per cent) and its "revision" in 1910. In Spain, the tariff of 1877 already contains high duties on industrial goods; particular attention is due the tariff of 1906 with its general increase of duties. In the United States, that classical country of trusts and of the modern tariff policy, the characteristic features of protectionism are most salient. An increase of import duties begins in 1883 in connection with the growth of trusts, and reaches 40 per cent of the value of the imported goods; in 1873‑74, the general duties were 38 per cent; in 1887, 47.11 per cent; in 1880 (the McKinley Bill) we have a further increase of the tariff (91 per cent on woolen goods, and even as much as 150 per cent ad valorem on fine grades of woolens, 40‑80 per cent on metals, etc.); 28) there follow later the Dingley Bill (1897), and the Payne Tariff of 1909 which is one of the striking expressions of high protectionist tendencies. England, that citadel of free trade, is in a period of transition; there is an increasing number of ever sharper and more persistent voices demanding fair trade instead of free trade, i.e. , the introduction of a protectionist system (see, for instance, the activities of Chamberlain, the Imperial Federation League, and the United Empire League, etc.). A partial realisation of these tendencies is the system of preference tariffs between the mother country and the colonies. Beginning with 1898, Canada exchanged tariff privileges with England; in 1900, and again in 1906, those tariffs were developed and "improved"; at present, the privileges amount to 10‑50 per cent compared with foreign countries. In 1903, the example of Canada was emulated by the South African colonies (6.25‑25 per cent); in 1903, and again in 1907, New Zealand followed suit; in 1907, the Union of Australian Colonies joined (5‑10 per cent). At the so‑called Imperial Conferences ( i.e. , conferences of representatives of the colonies and of the British Government) the note of protectionism becomes more clearly audible each time. "Only a second‑rate thinker can be in favour of free trade at the present time and still be optimistic in relation to England," quoth with limitless bourgeois conceit the well‑known economist, Aschli, thus expressing the sentiment of the English ruling classes. 29)

It is well known that the war has brought out all tendencies in the sharpest form; the tariff policy has become a fact. We must also mention the unusually high tariffs prevailing in Russia.

The new policy [says Mr. Kurchinsky] has its origin in the tariff of 1877. 'Since then the country is passing to higher and higher tariffs. In 1877 an increase was effected by levying the duties in gold currency, which at once raised them 40 per cent. The subsequent years brought further increases in duties levied upon a great number of commodities, thus developing the protectionist principles more and more; in 189o all tariffs were raised 20 per cent. The movement culminates in the extremely protectionist tariff of 1891, in which the duties levied upon many commodities were increased 100‑300 per cent and even more above the duties of 1868" [ italics ours. N.B. ]. "The tariff now in effect was promulgated in 1903 and became effective February 16, 1906. According to this tariff, many duties were still further increased 30) [ italics ours. N.B. ].

There is not the slightest doubt that we have before us a general tendency towards protecting the "national economies" by a high tariff wall. The fact that in individual cases there may be a lowering of the tariffs or mutual concessions stipulated in treaties, does not alter the general rule; all such facts are only exceptions, temporary halts, an armistice in the everlasting war. The general tendency is in no way disturbed by such facts, since the tendency is not a simple empirical fact, not an accidental phenomenon, not something irrelevant as regards modern relations; on the contrary, the very structure of modern capitalism gives birth to this form of economic policy; together with that structure it comes into being, and together with it it will fall.

The important economic part now played by tariffs brings about also the aggressive character of the policy of "modern capitalism." Indeed, it is due to the tariffs that monopoly organisations gather additional profit, to be utilised also as export premiums in the struggle for markets (dumping). This additional profit may grow, generally speaking, in two ways: first, through more intensive selling inside the limits of the existing state territory; second, through the growth of the latter. As regards the former, there is an obstacle here in the shape of market capacity; one cannot imagine that the big bourgeoisie would begin to increase the share of the working class, in order thus to drag itself out of the mire by the hair. Cunning businessmen that they are, they prefer to follow the other way, the way of enlarging economic territory. The greater the economic territory, other conditions being equal, the greater will be the additional profit, the easier it will be to pay export premiums and to practice dumping, the larger consequently will be the foreign sales, and the higher the rate of profit. Let us imagine that the volume of commodities prepared for export is unusually large compared with the volume that can be absorbed in the home market. Under such conditions it is impossible to compensate the losses sustained on the foreign market by the monopoly prices at home: dumping then proves senseless. On the other hand, where there is a "correct" ratio between internal sales and exports, a maximum of profits can be squeezed out. This is possible only when the internal market has a certain capacity, which, assuming demand to be equal, is determined by the size of the territory included within the tariff walls, i.e. , the state boundaries. While in former times, in the era of free competition, it was sufficient simply to penetrate the foreign market with commodities, and such economic occupation satisfied the capitalists of the exporting country, in our era the interests of finance capital demand, first of all, an expansion of the home state territory, i.e. , it dictates a policy of conquest, a pressure of military force, a line of "imperialist annexation." It is perfectly clear, however, that wherever the old liberal system of free trade has been preserved to a considerable degree in consequence of a special combination of historic conditions, and where on the other hand the state territory is sufficiently large, there we have, together with the policy of conquest, a tendency towards combining the disunited parts of the state organism, towards fusing the colonies with the metropolis, towards forming a vast single empire with a general tariff wall. Such is the policy of English imperialism. There is nothing behind the discussions about the creation of a middle European tariff alliance but the wish to create a vast economic territory as a monopoly system allowing more successful competition on the external market. In reality this is a product of the interests and the ideology of finance capitalism which, penetrating into all the pores of world economy, creates at the same time an unusually strong tendency towards secluding the national organisms, towards economic autarchy as a means of strengthening the monopoly situation of the respective capitalist groups. Thus, together with the internationalisation of economy and the internationalisation of capital, there is going on a process of "national" intertwining of capital, a process of "nationalising" capital, fraught with the greatest consequences. 31)

This process of "nationalisation" of capital, i.e. , the creation of homogeneous economic organisms included within state boundaries and sharply opposing each other, is also stimulated by changes taking place in the three large spheres of world economy: the sphere of markets for the sale of commodities, the sphere of markets for raw materials, and the sphere of capital investment. From these three points of view we must analyse the changes that are taking place in the conditions of the reproduction of world capital.

1) We cannot dwell here at length on the differences between those economic forms. For our purposes here, suffice it to be said that we do not see any fundamental difference between cartels and trusts, the trust in our opinion being only a more centralised form of the same phenomenon. All purely formal attempts (compare, for instance, Eduard Heilmann Ueber Individualismus und Solidarismus in der kapitalistischen Konzentration" in Jaffe's Archiv , Bd. 39, Heft 3) at defining the difference between the two forms by saying that the trust is "autocratic" while the syndicate (or cartel) is "democratic," does not in the least tackle the real issue, the latter being the outcome of the part played by those formations in the national economic life. It does not follow, however, that there is no difference at all between them; on the contrary, from a certain point of view, one must emphasise the difference. At any rate, the difference does not lie on the level of the distinction between the "democratic" and "autocratic" principle. See corresponding chapters in Hilferding's Finanzkapital . Briefly, the difference is that "contrary to the process of trustification, cartelisation by no means signifies the elimination of a conflict of interests between the individual enterprises belonging to the cartel" (Hilferding: "Organisationsmacht and Staatsgewalt," Neue Zeit , 32. Jahrgang, 2. Bd., p. 140.

2) Prof. Nazarevsky: Outline of the History and Theory of Capitalist Collective Economy, Syndicates, Trusts, and Combined Enterprises , Vol. 1, part I, Outline of the History of Combinations in American Industry , Moscow, 1912, PP. 378‑379

3) Ibid . Also George Renard and A.A. Dulac: L'évolution industrielle et agricole depuis cent cinquante ans , Paris, 1912, p. 204.

4) L. Goldstein: Syndicates, Trusts, and Modern Economic Policy , Moscow, 1912, p. 51.

5) Eugen von Phillipovich: "Monopole and Monopolpolitik," in Grünberg's Archiv für die Geschichte des Sozialismus und der Arbeiterbewegung , Bd. VI (79r5), Heft I, p. 758.

6) Robert Liefmann: Kartelle und Trusts , Stuttgart 1910.

7) Dr. S. Tschierschky: Kartell and Trust , Leipzig, Göschen, 1911, p. 52.

8) A. Raffalovich: "Les syndicats et les cartels en allemagne en 1910," in Revue internationale de commerce, de l'industrie et de la banque , July 30, 1911.

9) Martin Saint Leon: Cartels et Trusts , 3me ed., Paris, 1909, p. 56.

10) Martin Saint Leon, l.c. , p. 89 ff .

11) G. Lecarpentier: Commerce maritime et marine marchande , Paris, 1910, p. 165.

12) Hermann Levy: Monopoly and Competition , London, 1911, pp. 222‑267.

13) We quote from L. Kafenhaus: Syndicates in the Russian Iron Industry ; Goldstein, l.c. ; Zagorsky, l.c.

14) Goldstein, l.c. , p. 5.

15) Nazarevsky, l.c. , p. 354 ff .

16) Rudolf Hilferding: Das Finanzkapital , Vienna, 1910, p. 283.

17) Werner Sombart: Die Deutsche Volkswirtschaft in XIX. Jahrhundert , Berlin, 1913, chapter x. According to recent newspaper reports (the Vorwärts , Berlin), the Diskontogesellschaft has already swallowed up the Schaffhausenscher Bankverein.

18) J. Riesser: Die Deutschen Grossbanken , Appendix VIII, p. 745

19) Nazarevsky, l.c. , p. 362.

20) Parvus: Der Staat, die Industrie und der Sozialismus , p. 77 (Written when Parvus was still in the "first stage" of his transformations). Riesser, l.c. , Beilage IV, p. 651 ff .

21) Riesser, l.c. , p. 501.

22) K. T. Eheberg: Finanzwissenschaft , 1922, p. 99. [The author quotes here from an early Russian translation.‑ Trans .]

23) See Kommunales Jahrbuch for 1913‑14, published by Lindemann, Schwander and Südekum, p. 566

24) See Willy Baumgart: Unsere Reichbank. Ihre Geschichte and ihre Verfassung , Berlin, 1915. The role of the state as an organiser of industry has grown tremendously during the war. We shall discuss this later, when dealing with the future of national and world economy.

25) Friedrich List: Gesammelte Schriften , herausgegeben von Ludwig Häuser in 3 Teilen, Stuttgart and Tübingen, 1851. Das nationale System der politischen Oekonomie , pp. 302‑311. [English: The National System of Political Economy , New York, 1904.‑ Trans .]

26) Karl Marx: Capital , Vol. III, Untermann's translation, p. 142, Note 16 (by Engels). This, however, is of little aid to Prof. Josef Gruntzel, who does not understand the above‑mentioned phenomena. See his Handelspolitik , Part IV, of Grundriss der Wirtschaftspolitik , p. 76. In justice, it must be noted, however, that the difference between educational and cartel duties is commonplace in economic literature, from Brentano to Hilferding. See, for instance, Josef Hellauer: System der Welthandelslehre , Vol. I, IWO, p. 37 Tschierschky, l.c. , p. 86, etc.

27) We must not forget that when we speak of the policies of countries we mean the policies of their governments as determined by the social forces on which the governments are based. Unfortunately, it is still necessary to remind one of this truth, for there are gentlemen like Mr. Plekhanov & Co., whose point of view is the "scientifically absolutely untenable 'national' point of view."

28) Isayev: World Economy , pp. m5‑m6. Prof. Isayev's explanation of these phenomena are unique. The raising of the tariffs in 1862‑4 he explains, e.g., by "the protectionist inclinations of the persons who managed American finances." He says so verbatim (pp. 114‑115). See also Gruntzel, l.c .

29) W.J. Aschli: "La conference impériale britannique de 1907," in Revue économique internationale , 1907 Vol. 4, p. 477.

30) Kurchinsky's addenda to Prof. Eheberg's book quoted above (p. 411). to the increase in the duties levied upon German manufactured goods in 1904, even Mr. Kurchinsky says, that "it was hardly advantageous for Russian national business" (p. 412). He thus distinguishes between business and the businessman. This ad notam of those who unlearn in old age.

31) When we speak of "national" capital, "national" economy, we have in mind, here as elsewhere, not the element of nationality in the strict sense of the word, but the territorial state conception of economic life.

Contents | Chapter 3 | Chapter 5

Bukharin Archive

World Sales Markets and Changed Sales Conditions

N.I. Bukharin: Imperialism and World Economy