IN his book, Imperialism: the Highest Stage of Capitalism, Lenin refers to imperialism as a “special stage,” “a very high stage of development,” “specific historical stage,” “the latest phase” and “the beginning of its transition to socialism.”

Imperialism, writes Lenin, is the stage of capitalism’s development in which “the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance.”

Rarely does he refer to it as the highest stage — but, given the title of the work, it has invariably been interpreted literally, that capitalism can evolve no further for it has reached its zenith.
 
Whether this is what Lenin intended is irrelevant, for this approach has permeated the communist movement and the left in general, yet it has little Marxist merit. It implies that once that stage is reached (which Lenin dates back to the early 20th century), time stands still, capitalism’s internal contradictions disappear and with them any further evolutionary development. But what happens to the socialist embryo that is born within capitalism? Does that cease to evolve as well?

This is far from trivial or obscure. This literal interpretation has fashioned the attitude of the left and shaped its policies. Here in Britain, it has led directly to the present obsession with the Labour Party as the agent of change, which has resulted in an unhealthy preoccupation with the minutiae of internal Labour politics and its leader.

But the agent for change is the working class. They may choose to use the Labour Party as the conduit for change as they did in 1945 — or the Tory Party, as they did in 2019 when they voted Conservative to get Brexit done.

Capitalism never ceased to evolve in ways that were not foreseen by Lenin and in the case of the export of capital, the exact opposite. As it evolves, the building blocks of socialism are established and strengthened with the state playing a central role either directly providing aid and support or indirectly through the interventions of a central bank in the financial market.  

Capitalism’s evolutionary development is spurred on by the relentless pressure on the rate of profit to fall, capitalism’s Achilles heel, in which advances in technology that capitalists seek in order to replace labour with machines to increase profit inevitably result in a drop in the rate of profit.

In the 1970s, the rate of profit suffered a large decline. There was a real risk of capital entering a zone of continually falling profits. The additional capital investment needed to prevent this was too large for the private sector to provide. This is when Margaret Thatcher’s liberalisation came to the rescue.

A global market was created. Exchange controls were abolished allowing capital the freedom to exploit every corner of the globe. Supply lines were stretched across continents making just-in-time production even more precarious than it normally is.

This was coupled with private finance chasing profits not through production but through financial instruments in pursuit of the tiniest of profit margins. Abandoning the very raison d’etre of capitalism, that of producing commodities, in favour of financial trading and speculation, was bound to come to a sticky end.

It ended with the collapse of Lehman Brothers in 2007 and the subsequent 2008 financial crisis. The neoliberal playbook was quickly abandoned with the state having to step in with an unprecedented intervention in the financial market to keep the financial system afloat.

Capitalism’s only way to survive was to adopt socialist policies that not long before were considered an outright sin. During the pandemic, the state even paid the wages of workers, capital’s job description.

The strategy of campaigning for a Labour government as the way forward has been tried and tested; tested to destruction. It has passed its use-by date; it has failed. It is time for a new approach.

It is time to move beyond making demands on the government for higher pay and better conditions, for that surrenders responsibility to the government. It is time to move beyond that and articulate a comprehensive strategy for national renewal — a strategy that we would implement if we were holding the levers of power — and enforce it on whoever happens to occupy 10 Downing Street.

Imagine our strength when our demands are backed up by a serious well-thought-out national plan. But that will entail accepting some notions and principles that have so far been rubbished or ignored, fearing that they may undermine our claim for improved pay and conditions.

A case in point is the notion that “the country has to live within its means.” Keir Starmer was denounced for refusing to say that a Labour government would pay the health workers the money they are asking for and the incoming TUC general secretary, Paul Nowak, was criticised for saying Labour will not be able to “turn the taps on from day one” on public spending.

But living within our means is instinctively accepted by workers — and rightly so. Planning, the central pillar of any socialist platform is predicated on the fact that a country has limited resources otherwise why is there a need for a plan; why not just spend money to meet all demands?

A national strategy for renewal must include finance, both public and private, because finance is the scaffolding that buttresses and conditions the shape of the nation’s whole economy. Sound, stable finances are a prerequisite to any serious attempt to rebuild industry, revive agriculture, improve public services and combat climate change.

For too long, finance has been regarded as secondary to the bigger picture, that of pay and conditions. In fact, finance is the bigger picture. So far, the left’s approach to public spending has been tax-and-spend and borrow-to-invest. The former penalises workers who pay the majority of taxes.

Taxing high earners brings little in terms of revenue and taxing wealth which may bring extra revenue, makes private wealth legitimate and does nothing to reduce inequality. As for borrow-to-invest, it exasperates our dependence on private finance and increases the national debt.

A ground-breaking pamphlet by Rebuild Britain, Government Spending and Debt: a New Approach, provides an alternative to the conventional left approach to public finance.

It advocates a two-pronged strategy: printing money to finance public spending and simultaneously reducing private investment by the same amount. The latter avoids the risk of price inflation associated with printing money. This approach makes funds available for spending on welfare and investments for the future without incurring debt and with the added bonus of reducing inequality.

Fawzi Ibrahim is the author of Capitalism Versus Planet Earth: an Irreconcilable Conflict (Muswell Press 2012).