N.I. Bukharin: Imperialism and World Economy


Chapter 10: Reproduction of the Processes of Concentration and Centralisation of Capital on a World Scale


The two most important processes of capitalist development are concentration and centralisation of capital; they are often confused but must be clearly distinguished. This is how Marx defines these terms:

Every individual capital [he says] is a larger or smaller concentration of the means of production, giving command over a larger or smaller army of workers. Every accumulation becomes the means of new accumulation. As the mass of wealth which functions as capital increases, there goes on an increasing concentration of that wealth in the hands of individual capitalists, with a resultant widening of the basis of large-scale production and of the specific methods of capitalist production. The growth of social capital is affected by the growth of many individual capitals.... Two points characterise this kind of concentration which is directly dependant upon accumulation, or, gather, identical with it [italics ours - N.B.]. First of all, the increasing concentration of the social means of production into the hands of individual capitals, is, other conditions being equal, restricted by the extent of social wealth. In the second place, the part of social capital domiciled in each particular sphere of production is divided among many capitalists, who face one another as independent commodity producers competing one with another.... This splitting up of social capital into a number of individual capitals, or the repulsion of its fragments one by another, [Marx here has in mind the division of property, etc. - N.B.], is counteracted by their attraction. The latter is not simply a concentration of the means of production and command over labour identical with accumulation. It is the concentration of already formed capitals, the destruction of their individual independence, the expropriation of capitalist by capitalist, the transformation of many small capitals into a few large ones. This process is distinguished from simple accumulation by this, that it involves nothing more than a change in the distribution of capitals that already exist and are already at work....Capital aggregates into great masses in one hand because, elsewhere, it is taken out of my hands. Here we have genuine centralisation in contradistinction to accumulation and concentration.1)

To summarise. By concentration we understand the increase of capital that is due to the capitalisation of the surplus value produced by that capital; under centralisation we understand the joining together of various individual capital units which thus form a new larger unit. Concentration and centralisation of capital pass through various phases of development, which we must now survey. Let us note in passing that both processes, concentration and centralisation, influence one another. A great concentration of capital accelerates the absorption of small-scale enterprises by large-scale ones; conversely, centralisation aids the increase of individual capital units and so accelerates the process of concentration.

The primary form in the process of concentration is concentration of capital in an individual enterprise. This form predominated up to the last quarter of the nineteenth century. The accumulation of social capital is here expressed in the accumulation of the capital of individual entrepreneurs who oppose one another as competitors. The development of joint stock companies, which made it possible to use the capital of a considerable number of individual entrepreneurs, and which radically undermined the principle of individual ownership of enterprises, created the prerequisites for large monopolistic associations of entrepreneurs. Concentration of capital assumed a new form here, namely, the form of concentration in trusts. Capital accumulation no more increased the capital of individual producers; it turned into a means of increasing the capital of entrepreneurs' organisations. The tempo of accumulation increased to an extraordinary degree. Huge masses of surplus value, far exceeding the needs of an insignificant group of capitalists, are converted into capital to begin a new cycle. But even here the development does not stop. The individual production branches are in various ways knit together into one collective body, organised on a large scale. Finance capital seizes the entire country in an iron grip. "National economy" turns into one gigantic combined trust whose partners are the financial groups and the state. Such formations we call state capitalist trusts. Of course, the latter formations cannot be identified with the structure of a trust in the proper sense of the word; a trust proper is a, much more centralised and less anarchic organisation. To a certain degree, however, particularly in comparison with the preceding phase of capitalism, the economically developed states have already advanced far towards a situation where they can be looked upon as big trust-like organisations or, as we have termed them, state capitalist trusts. We may, therefore, speak at present about the concentration of capital in state capitalist trusts as component parts of a much larger socio-economic entity, world economy.

It is true that the early economists already spoke of the "accumulation of capital in a country," this being one of the favourite subjects, as witnessed, for instance, by the title of Adam Smith's principal book. At that time, however, the expression had a considerably different meaning, for "national economy," or the "economy of a country" by no means represented a collective capitalist enterprise, a single gigantic combined trust-a form largely adopted at present by the foremost capitalist countries.

Parallel with the change in the forms of concentration went the change in the forms of centralisation. Where individual ownership of enterprises prevailed, individual capitalists opposed one another in the competitive struggle. At that time "national economy" and "world economy" were only sum totals of those comparatively small units that were interconnected by the circulation of commodities and competed with each other mainly within "national" limits. The centralisation process consisted in small capitalists being absorbed by large ones, in the growth of large-scale, individually owned, enterprises. With the growth of large-scale enterprises the extensive character of competition (within given territorial limits) decreased more and more; the number of competitors shrank with the growth of centralisation. On the other hand, the intensity of the competition increased tremendously, for the smaller number of larger enterprises began to place on the market volumes of commodities unknown in former times. Concentration and centralisation of capital finally brought about the formation of trusts. Competition rose to a still higher stage. Where formerly many individually owned enterprises competed with one another, there appeared the most stubborn competition between a few gigantic capitalist combines pursuing a complicated and, to a considerable degree, calculated policy. There finally comes a time when competition ceases in an entire branch of production. But the war for dividing up the surplus value between the syndicates of the various branches becomes fiercer; organisations producing manufactured goods arise against syndicates producing raw materials, and vice versa. The centralisation process proceeds apace. Combines in industry and banking syndicates unite the entire "national" production, which assumes the form of a company of companies, thus becoming a state capitalist trust. Competition reaches the highest, the last conceivable state of development. It is now the competition of state capitalist trusts in the world market. Competition is reduced to a minimum within the boundaries of "national" economies, only to flare up in colossal proportions, such as would net have been possible in any of the preceding historic epochs. Of course, there existed competition between "national economies," i.e., between their ruling classes, also in former times. That competition, however, was of an entirely different nature, for the inner structure of those "national economies" was entirely different. "National economy" did not appear on the arena of the world market as a homogeneous organised whole endowed with unusual economic strength; inside of it absolutely free competition reigned. On the other hand, competition in the world market was extremely weak. All this looks entirely different now in the epoch of finance capitalism, when the centre of gravity is shifted to the competition of gigantic, consolidated, and organised economic bodies possessed of a colossal fighting capacity in the world tournament of "nations." Here competition holds its orgies on the greatest possible scale, and together with this there goes on a change and a shift to a higher phase in the process of capital centralisation. The absorption of small capital units by large ones, the absorption of weak trusts, the absorption even of large trusts by larger ones is relegated to the rear, and looks like child's play compared with the absorption of whole countries that are being forcibly torn away from their economic centres and included in the economic system of the victorious "nation." Imperialist annexation is only a case of the general capitalist tendency towards centralisation of capital, a case of its centralisation on that maximum scale which corresponds to the competition of state capitalist trusts. The arena of this combat is world economy; its economic and political limits are a world trust, a single world state obedient to the finance capital of the victors who assimilate all the rest - an ideal of which even the hottest heads of former epochs never dreamed.

One may distinguish two kinds of centralisation: the one where an economic unit absorbs another unit of the same kind, and the one which we term vertical centralisation, where an economic unit absorbs another of a different kind. In the latter case we have "economic supplement" or combination. At present, when the competition and the centralisation of capital are being reproduced on a world scale, we find the same two types. When one country, one state capitalist trust, absorbs another, a weaker one possessed of comparatively the same economic structure, we have a horizontal centralisation of capital. Where, however, the state capitalist trust includes an economically supplementary unit, an agrarian country for instance, we have the formation of a combine. Substantially the same contradictions and the same moving forces are reflected here as within the limits of "national economies"; to be specific, the rise of prices of raw materials leads to the rise of combined enterprises. Thus on the higher stage of the struggle there is reproduced the same contradiction between the various branches, but on a considerably wider scale.

The actual process of development of modern world economy knows both these forms. An example of a horizontal imperialist annexation is the seizure of Belgium by Germany; an example of vertical annexation is the seizure of Egypt by England. None the less, it is customary to reduce imperialism to colonial conquests alone. This entirely erroneous conception formerly found some justification in the fact that the bourgeoisie, following the line of least resistance, tended to widen its territory by the seizure of free lands that offered little resistance. Now, however, the time has come for a fundamental redivision. Just as trusts competing with one another within the boundaries of a state first grow at the expense of "third persons," of outsiders, and only after having destroyed the intermediary groupings, thrust themselves against one another with particular ferocity, so the competitive struggle between state capitalist trusts first expresses itself in a struggle for free lands, for the jus primi occupantis, then it stages a redivision of colonies, and finally, when the struggle becomes more intense, even the territory of the home country is drawn into the process of redivision. Here, too, development proceeds along the line of least resistance, and the weakest state capitalist trusts first disappear from the face of the earth. This is the general law of capitalist production, which can fall only with the fall of capitalist production itself.


1) Capital, Vol, I, pp. 690-691.