This is the fifth and final part of the lecture “World War I: The breakdown of capitalism”. It was delivered by Nick Beams, the national secretary of the Socialist Equality Party of Australia and a member of the WSWS Editorial Board, at the Socialist Equality Party/WSWS summer school held August 14 to August 20, 2005 in Ann Arbor, Michigan. The lecture appeared in five parts and was republished afterward in a single part.
This is the fifth lecture that was given at the school. The first, entitled “The Russian Revolution and the unresolved historical problems of the 20th century” was posted in four parts, from August 29 to September 1. The second, entitled “Marxism versus revisionism on the eve of the twentieth century,” was posted in three parts on September 2, 4 and 5. The third, entitled “The origins of Bolshevism and What Is To Be Done?” was posted in seven parts from September 6 to September 13. The fourth, entitled “Marxism, history and the science of perspective,” was posted in six parts from September 14-20. These lectures were authored by World Socialist Web Site Editorial Board Chairman David North.
Beginning September 27, the WSWS will begin posting the sixth lecture, “Socialism in One Country or Permanent Revolution,” delivered by Bill Van Auken, which will be posted in three parts.
Lenin’s Imperialism vs. Kautsky’s “ultra-imperialism”
Lenin’s analysis, both in Imperialism and his writings throughout the war leading up to the October Revolution, can be understood only by considering the positions against which it was advanced. Imperialism is a direct refutation of Karl Kautsky, who provided the theoretical rationale for the betrayals of the leaders of the Second International, who supported their “own” bourgeoisie in the imperialist war.
When Lenin wrote of imperialism as the “highest” stage of capitalism, it was in answer to Kautsky’s assertion that militarism and war were not objective tendencies of capitalist development, but rather a passing phase, and that the ferocious conflict which had erupted among the capitalist great powers—the unleashing of barbarism—could be replaced by a peaceful division of the earth’s resources, much in the same way as monopolies, arising out of free competition, form cartels to divide up the market.
The analysis of World War I undertaken by Lenin, Trotsky, Luxemburg and other Marxists not only showed that the war had arisen from the mounting contradictions of capitalism. It went further and explained that the eruption of the war itself was a violent expression of the fact that the progressive epoch of capitalist development was over. Henceforth, as Rosa Luxemburg put it, mankind faced the historical alternatives of socialism or barbarism. Therefore, socialism became an objective historical necessity if human progress were to continue. The struggle for political power by the working class was not a perspective for the indefinite future, but had been placed on the agenda.
Kautsky sought to base his opposition to this perspective on the grounds of Marxism. The capitalist system, he maintained, had not exhausted itself, the war did not represent its death agony and the working class, having been unable to halt the war, was in no position to launch a struggle for the overthrow of the bourgeoisie.
Almost 30 years before, however, Frederick Engels had presented an entirely different perspective, grounded in the understanding that a whole epoch had come to a close and that future wars would be very different from those of the nineteenth century.
“No war is any longer possible for Prussia-Germany,” he wrote, “except a world war and a world war indeed of an extent and violence hitherto undreamt of. Eight to ten millions of soldiers will massacre one another and in so doing devour the whole of Europe until they have stripped it barer than any swarm of locusts has ever done. The devastations of the Thirty Years’ War compressed into three or four years, and spread over the whole Continent; famine, pestilence, general demoralisation both of the armies and the mass of the people produced by acute distress; hopeless confusion of our artificial machinery in trade, industry and credit, ending in general bankruptcy; collapse of the old states and their traditional state wisdom to such an extent that crowns will roll by the dozens on the pavement and there will be no body to pick them up; absolute impossibility of foreseeing how it will all end and who will come out of the struggle as victor; only one result is absolutely certain: general exhaustion and the establishment of the conditions for the ultimate victory of the working class.” 
Defending the SPD decision to vote for war credits, Kautsky based himself on the initial support given by sections of the masses for the war. It was not possible to oppose the war, let alone strive for the overthrow of the bourgeoisie, under those conditions. Above all, he argued, there must be no struggle in the party against the most right-wing supporters of the government and the war. “In war,” he wrote, “discipline is the first requisite not only in the army but also in the party.” The most urgent task of the day was to “preserve the organizations and organs of the party and trade unions intact.” 
The alternative of imperialism or socialism was a gross oversimplification of a complex situation. It was necessary to maintain the party and its organizations and prepare for a return to peaceful conditions when the party would resume its pre-war course.
In his struggle against Kautsky, Lenin made clear that it was necessary to deal with the objectivism and outright fatalism that had come to dominate the Second International. In Kautsky’s hands, Marxism had been transformed from a guide to revolutionary action into a sophisticated rationalisation for the accomplished fact.
It was not possible, Lenin insisted, to make an estimate of the objective situation without including in that assessment the role of the party itself. It was true that the masses had not opposed the war, but this “fact” could not be considered apart from the role of the party, and above all its leadership. In pledging its loyalty to the Hohenzollern regime, the SPD itself had contributed to this situation. Not that Lenin maintained that the party had the task of launching an immediate struggle for the seizure of power—this was a caricature conjured up by the opportunists. It was, however, necessary to maintain intransigent opposition to the government to prepare the conditions when the masses themselves would turn against it.
According to the opportunists, the government was at its strongest when launching the war and hence the party could not openly oppose it, as such action would lead to the destruction of the party. On the contrary, Lenin maintained, in launching a war the ruling regime was more than ever in need of the support of the very parties that had claimed to oppose it in the past.
Lenin’s assessment has been verified by the historical record. The attitude of the SPD towards the launching of a war had been under discussion for some time in German ruling class and political circles. There were fears that if a war went badly the downfall of the regime itself would rapidly follow military defeat.
In the July crisis, the position of the SPD figured prominently in the calculations of Bethmann-Hollweg. His tactics were determined by the assessment that the SPD leaders would support the war if it could be presented so as to appear that rather than initiating an offensive, which was actually the case, Germany was responding to an attack from Russia. A war against tsarism could then be given a “progressive” colouration.
At the heart of the conflict between Lenin and Kautsky was their opposed assessments of the future of capitalism as a social system. For Lenin, the necessity for international socialist revolution—the Russian Revolution of 1917 was conceived of as the first step in this process—flowed from the assessment that the eruption of imperialist war represented the opening of an historic crisis of the capitalist system, which, despite truces and even peace settlements, could not be overcome.
Moreover, the very economic processes which lay at the heart of the imperialist epoch—the transformation from competitive capitalism of the nineteenth century to the monopoly capitalism of the twentieth—had created the objective foundations for the development of an international socialist economy.
Kautsky’s perspective was set out in an article published as the war was breaking out, but prepared in the months leading up to it, in which he raised the prospect that the present imperialist phase may give rise to a new epoch of ultra-imperialism.
Imperialism, he wrote, was a product of highly industrialised capitalism, which consisted of the impulse of every industrial capitalist nation to conquer and annex an ever greater agrarian zone. Moreover, the incorporation of the conquered zone as a colony or a sphere of influence of the given industrial nation meant that imperialism came to replace free trade as a means of capitalist expansion. The imperialist conquest of agrarian regions and the efforts to reduce their populations to slavery would continue, Kautsky maintained, and would cease only when the populations of the colonies or the proletariat of the industrialised capitalist countries had grown strong enough to throw off the capitalist yoke. This side of imperialism could be conquered only by socialism.
“But imperialism has another side. The tendency towards the occupation and subjugation of the agrarian zones has produced sharp contradictions between the industrialized capitalist states, with the result that the arms race which was previously only a race for land armaments has now also become [a] naval arms race, and that the long prophesised World War has now become a fact. Is this side of imperialism, too, a necessity for the continued existence of capitalism, one that can only be overcome with capitalism itself?
“There is no economic necessity for continuing the arms race after the World War, even from the standpoint of the capitalist class itself, with the exception of at most certain armaments interests. On the contrary, the capitalist economy is seriously threatened precisely by the contradictions between its states. Every far-sighted capitalist today must call on his fellows: capitalists of all countries, unite!”
Just as Marx’s analysis of competition pointed to the development of monopoly and the formation of cartels, Kautsky continued, the result of the war could be a federation of the strongest imperialist powers to renounce the arms race.
“Hence from the purely economic standpoint it is not impossible that capitalism may still live through another phase, the translation of cartellization into foreign policy, a phase of ultra-imperialism, which of course we must struggle against as energetically as we do against imperialism, but whose perils lie in another direction, not in that of the arms race and the threat to world peace.” 
According to Kautsky’s analysis, there was no objective historical necessity to overturn capitalism through the socialist revolution in order to end the barbarism unleashed by imperialist war. On the contrary, save for a few isolated sections connected with the arms industry, the imperialists themselves had an interest in coming together to secure a state of world peace within which to continue their economic plunder.
In his reply to Kautsky, Lenin made clear that whereas the tendency of economic development was towards the development of a single world trust, this development proceeded through such contradictions and conflicts—economic, political and national—that capitalism would be overthrown long before any world trust materialised and the “ultra-imperialist” amalgamation of finance capital could take place.
Furthermore, ultra-imperialist alliances, whether of one imperialist coalition against another or a “general alliance embracing all the imperialist powers” are “inevitably nothing more than a ‘truce’ in periods between wars. Peaceful alliances prepare the ground for wars, and in their turn grow out of wars; the one conditions the other, producing alternating forms of peaceful and non-peaceful struggle on one and the same basis of imperialist connections and relations within world economics and world politics.” 
There were profound objective reasons, rooted in the very nature of the capitalist mode of production itself, as to why it was impossible to maintain an ultra-imperialist alliance of the kind envisaged by Kautsky. Capitalism by its very nature developed unevenly. After all, 50 years previously Germany was a “miserable, insignificant country” if her capitalist strength were compared with Britain at that time. Now she was challenging for the hegemony of Europe.
It was inconceivable that in 10 or 20 years time the relative strength of the imperialist powers would not have altered again. Accordingly, any alliance formed at one point in time on the basis of the relative strength of the participants would break down at some point in the future, giving rise to the formation of new alliances and new conflicts, because of the uneven development of the capitalist economy itself.
There was another key aspect of Lenin’s analysis, no less important than his refutation of Kautsky’s perspective of ultra-imperialism. The objective historical necessity for socialist revolution arose not simply from the fact that imperialism and monopoly capitalism inevitably gave rise to world wars. It was rooted in the very transformations in economic relations that were being induced by monopoly capitalism.
“Socialism,” Lenin wrote, “is now gazing at us through all the windows of modern capitalism.”  It was necessary, he insisted, to examine the significance of the changes in the relations of production that were being effected by the development of monopoly capitalism. There was not just mere interlocking of ownership. A vast global socialisation of production was taking place at the base of monopoly capitalism.
“When a big enterprise assumes gigantic proportions, and, on the basis of an exact computation of mass data, organises according to plan the supply of primary raw materials to the extent of two-thirds, or three-fourths of that which is necessary for tens of millions of people; when the raw materials are transported in a systematic and organised manner to the most suitable places of production, sometimes situated hundreds or thousands of miles from each other; when a single centre directs all the consecutive stages of processing the material right up to the manufacture of numerous varieties of finished articles; when these products are distributed according to a single plan among tens and hundreds of millions of consumers ... then it becomes evident that we have socialisation of production and not mere ‘interlocking’; that private economic and private property relations constitute a shell which no longer fits its contents, a shell which must inevitably decay if its removal is artificially delayed, a shell which may remain in a state of decay for a fairly long period ... but which will inevitably be removed.” 
Lenin did not claim that it was impossible for capitalism to continue. Rather, the economic and property relations would continue to decay if their removal were artificially delayed, that is, translating the guarded language of the pamphlet used to escape the censor, if the present leaderships of the working class were not replaced.
For Lenin, everything turned on this question. That is why he, above all others in the international Marxist movement, insisted on the necessity for a complete break from the Second International, not just the open right-wingers, but above all from the centrists such as Kautsky who played the most dangerous role. The establishment of the Third International was an historic necessity.
For Harding, however, there is a fundamental contradiction between an analysis which reveals how objective processes within capitalism are making socialist revolution both possible and necessary, and the insistence, at the same time, of the vital, indispensable, role of the subjective factor in the historical process.
The presence of Lenin, he points out, was decisive for the revolution in Russia. No amount of theoretical discussion about the level of the productive forces, the level of socialist consciousness or the international situation could settle the issue of whether Russia would undertake a socialist revolution.
“It was, in fact, settled by the ‘accidental’ presence of one man with an unshakeable belief that one civilisation was foundering and that imperatively another had to be born. This is to say no more than that Marxism never was a ‘science of revolution’ and the search for definitive guidance with regard to the ‘objective’ limits of action, particularly and especially in periods of revolutionary trauma, was doomed to failure.” 
There is no gainsaying the decisive role of Lenin in the Russian Revolution. But he was such a powerful factor in the situation because his perspective was grounded on a far-reaching analysis of objective processes and tendencies of development.
Revolution has often been likened to the process of birth and the role of the revolutionary party to that of the midwife. The birth of the baby is the outcome of objective processes. But it is quite possible that, without the timely intervention of the midwife, guided by knowledge of the birth process itself, tragedy will result.
Analogies, of course, have their limits. But an examination of history will show that the decisive intervention of the “midwife” in the Russian Revolution brought the birth process to a successful conclusion, and likewise, the lack of such an intervention in the revolutionary upheavals in Germany and elsewhere in the period immediately after the war had consequences which proved to be disastrous. If Lenin was decisive in the Russian Revolution, then it must be said that the murder of Rosa Luxemburg played a significant role in the failure of the German revolution in the early 1920s.
We are left with the question: what would it mean to say that Lenin’s perspective had been refuted? Not that capitalism has continued to grow and that there have been developments in the productive forces.
The critical issue is this: has the growth of capitalism since World War I and the Russian Revolution overcome the contradictions upon which Lenin, Trotsky and the Bolsheviks based their perspective of world socialist revolution?
The significance of the Lenin-Kautsky conflict extends far beyond the immediate circumstances of World War I. It involved the clash of two diametrically opposed historical perspectives. Kautsky’s theory of ultra-imperialism did not simply mean the rejection of socialist revolution in the period surrounding the war, but for an indefinite period into the future. This is because at the heart of his world outlook was the conception that, in the final analysis, the imperialist bourgeoisie, recognising the dangers to its own rule resulting from the conflicts arising from the contradiction between the development of an ever more closely integrated global system of production and the political framework based on the nation-state system, would be able to take action to mitigate them.
No Marxist would ever deny the possibility that the bourgeoisie will take action to try to save itself. Indeed, the political economy of the twentieth century, at one level, could be written as the history of successive efforts by the bourgeoisie to take action to counteract the effect of the contradictions and conflicts generated by the capitalist mode of production and prevent the eruption of social revolution.
But analysis of the accumulation process—the heart of the capitalist mode of production—reveals that there are objectively given limits to the ability of the ruling classes to suppress these conflicts. While “capital as a whole” is a real entity, and its interests can be represented by far-sighted capitalist politicians at certain points, capital exists in the form of many capitals that are in continuous conflict with each other for a portion of the surplus value that is extracted from the working class. To the extent that the mass of surplus value available to capital as a whole is increasing, the conflicts between its different sections can be controlled and regulated. But once the situation turns, as it inevitably does, it becomes increasingly difficult for such regulation to take place and a period of inter-imperialist conflict, leading ultimately to armed conflict, ensues.
History confirms what theoretical analysis reveals. At the end of the 1980s, when the post-war framework of international relations was beginning to break down, one writer perceptively pointed to the relevance of the Lenin-Kautsky conflict.
“As American power and leadership decline due to the operation of the ‘law of uneven development’,” he wrote, “will confrontation mount and the system collapse as one nation after another pursues ‘beggar-my-neighbour’ policies, as Lenin would expect? Or, will Kautsky prove to be correct that capitalists are too rational to permit this type of internecine economic slaughter to take place?” 
That question has been answered in the period of nearly two decades since those lines were written. The postwar Atlantic alliance has all but broken down as a result of the increasingly aggressive role of US imperialism. Whereas the US sought to unite Europe in the aftermath of the war, it now seeks to set the European powers against each other for its own interests. The European powers, having established the Common Market and the European Union in order to prevent the reemergence of the conflicts that brought two world wars in the space of three decades, are more deeply divided than at any time since the Second World War.
A global conflict has erupted over markets and raw materials, especially oil. And in the East, the rise of China is being greeted with the question as to whether the emergence of this new industrial power will play the same destabilising role in the twenty-first century as the emergence of Germany did in the nineteenth and twentieth centuries.
The mechanisms that were set in place in the postwar period for regulating the conflicts between the capitalist great powers have either broken down or are in an advanced state of decay. At the same time, social polarisation is deepening on an international scale. The contradictions of the capitalist mode of production which gave rise to World War I have not been overcome, but are gathering with renewed force.
 Cited in Lenin, “Prophetic Words,” in Collected Works Volume 27, p. 494.
 Cited in Massimo Salvadori, Karl Kautsky and the Socialist Revolution 1880-1938 (London: Verso, 1990), p. 184.
 Kautsky, Ultra-imperialism in New Left Review, no. 59, January-February, 1970.
 Lenin, Collected Works, Volume 22, p. 295.
 Lenin, Collected Works, Volume 25, p. 363.
 Lenin, Imperialism, op cit, p. 303.
 Neil Harding, Leninism, p. 110.
 Robert Gilpin, The Political Economy of International Relations (Princeton University Press, 1987), p. 64.