Lenin’s Warnings On Finance Capital: A Hundred Years’ Notice

I  think most people would agree that Capitalism in the 19th and 20th centuries was forced to adopt several measures advocated by the socialists in order to maintain its position as the dominant form of material production and distribution.

However, one would not be overstating by much if one declared that the more Capitalism changes, the more it stays the same.  What Lenin wrote a hundred years ago about Finance Capital would still hold true today.

Lenin complained in Imperialism: The Highest Stage Of Capitalism, that the concentration of capital and the growth in size of the major banks was “radically changing the significance of the banks.”  By funneling their gains through the several large banks, “scattered Capitalists are transformed into a Single Collective Capitalist.”

Lenin explains that when, in the old days, a bank merely held the accounts of a few Capitalists, its involvement with the funds was an “exclusively auxiliary operation.”  “When, however, this operation grows to enormous dimensions,” writes Lenin, “we find that a handful of monopolists subordinate to their will all the operations, both commercial and industrial, of the whole of Capitalist society.”  Banks, possessing the power to extend or withhold credit, have de facto control of the means of production in a society.  But Lenin believed there was a higher echelon even above the banks.  He felt that the leading Capitalists, what he called “Big Capital,” controlled the banks “by means of their banking connections, their current accounts, and other financial operations,” and in this way, they decided for themselves whether to adopt banking policies “facilitating or hindering credits.”  In other words, the kids were put in charge of watching the candy store.

“A personal link-up, so to speak, is established between the banks and the biggest industrial and commercial enterprises,” states Lenin.  This is accomplished “through the acquisition of shares” and “through the appointment of bank directors to the supervisory boards (or boards of directors)” — “and vice versa.”  What we call today the ol’ “interlocking boards” game.  And all this is supported by the “personal link-up” between government and the financial world and between government and industry.  I like to call this the “golden triangle.” Money and influence run around the three-sided support network like a wand around around a dinner-triangle.

What’s amazing to me is that all this written nearly a hundred years ago.

Lenin believed he was living through “the turning-point” of Capitalism, “from the domination of capital in general, to the domination of finance capital.”

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