‘If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism.’ Lenin, 1916
Lenin’s definition of imperialism involves the control of the world economy by groups of monopolistic companies, not simply monopolised production in particular countries, and also a hierarchy of nations in the world economy, with the biggest capitalist powers dominating. The role of the state is important because of the inevitably uneven development of world capitalism. More economically developed countries will tend to have more productive companies that are larger and stronger in the world market, and a state that will tend to have bigger resources for domination than others. Lenin’s five summary features of imperialism were posed as the key aspects of a single imperialist reality, not as independent factors that happen to coincide, and the monopolistic development of the world economy was key.
Monopoly power is good for the monopolist, but less so for the national economy in which it operates. Hence, there is usually a state policy against local monopolies and cartels, complete with legislation or regulatory bodies to limit the abuse of market power. This is a rational move on the part of state authorities for the working of the domestic capitalist system, since a stranglehold over the supply of key commodities and services by a few companies could be damaging for all the others. Marx had already noted in Capital that the establishment of monopolies in certain spheres had provoked ‘state interference’.
Probably the most famous early example of this was the Sherman Antitrust Act of 1890 in the US, although it took other state measures to limit the power of Rockefeller’s Standard Oil, a trust that refined 80% of the national US oil output and overwhelmingly dominated the production, transport and markets for a range of other oil and energy products. There have been further ‘anti-monopoly’ policies in the US in the past century, and in other countries that have agencies to investigate and rule on markets, such as the UK’s optimistically named Competition Commission, a successor to its Monopolies Commission. Yet these have done little to prevent a steady drift towards further monopoly power in most sectors of the economy. An extreme example is in South Korea, which has been dubbed ‘the Republic of Samsung’ by locals, since the company’s conglomerate structure, from road construction to oil rigs, to hotels, insurance and smartphones, accounts for a fifth of national output.
However, the concern a particular state might have about market domination in the domestic sphere does not extend to the operations of its companies in the international market. On the contrary, large companies get significant backing from their states for expanding their foreign business. The logic here is that the consequence of any exercise of monopoly power is another country’s burden, one that might even favour the home country via the improved profitability of the domestically based company. Apart from any technical cost advantages that might result from larger scale global operations, international expansion also enhances the global market position of the company, boosting its monopolistic power.
Perhaps the only exception to this lax international policy is where EU member states have adopted an anti-monopoly policy within the EU area, as a means to promote a large single market that is considered to be in member countries’ joint interests. Hence, there have been some (limited) measures against price fixing in the EU. That has not stopped widespread manipulation of the ‘free market’, as detailed in a study of some 20 cartels published in 2006.
The result of the trend towards monopoly is that the worldwide production of most of the key products and the provision of most of the key services of modern capitalism is today dominated by a small number of companies. Fewer than around 10 companies often control the bulk of global activity in many areas, despite the further opening up of the world market in the past 30 years. Here are some examples:
- Over half of global vehicle production in 2001 was attributable to just five companies, and 11 companies accounted for over 80% of output.
- In the case of beer, so to speak, just four companies provided over half the world’s consumption in 2009.
- Glencore, ahead of its merger with Xstrata in May 2013 was reported to be controlling ‘more than half the international tradable market in zinc and copper and about a third of the world's seaborne coal; was one of the world's largest grain exporters, with about nine percent of the global market; and handled three percent of daily global oil consumption’.
- In a more recently developed market, mobile phones, the degree of monopolisation is little different: in 2010, six companies accounted for just over 60% of global sales, with Nokia and Samsung having nearly half the market between them.
- Everybody knows about the domination of Apple, Microsoft and Amazon in their respective markets.
Naturally, the monopolistic corporations of the world are not equally distributed among countries. An UNCTAD report showed that of the top 100 international non-financial corporations in 2008, ranked by total assets, 75 had a ‘home’ in just six: the US (18), UK (15), France (15), Germany (13), Japan (9) and Switzerland (5).
None of this information is a big surprise. However, I though it was worth sharing as a further illustration of today’s imperialist world economy.