The imperialist epoch emerged in its modern form during the last decades of the 19th century. The expansion of capitalist industry brought with it the growth of the working class and eruption of class struggle between the bourgeoisie and the new industrial proletariat in Europe and North America. This historical process had been theoretically anticipated in the development of Marxism. The Communist Manifesto was published in November 1847 on the eve of the first revolutionary struggles of the working class. Through the work of Karl Marx and Friedrich Engels, utopian projects for the general improvement of the human condition were superseded by the discovery of the objective laws governing the historical process. The materialist conception of history established, as Engels explained in his classic work Anti-Dühring, that:

...the production and, next to production, the exchange of things produced, is the basis of all social structure; that in every society that has appeared in history, the manner in which wealth is distributed and society divided into classes or estates is dependent upon what is produced, how it is produced, and how the products are exchanged. From this point of view the final causes of all social changes and political revolutions are to be sought, not in men’s brains, not in man’s better insight into eternal truth and justice, but in changes in the modes of production and exchange. They are to be sought, not in the philosophy, but in the economics of each particular epoch. The growing perception that existing social institutions are unreasonable and unjust, that reason has become unreason, and right wrong, is only proof that in the modes of production and exchange changes have silently taken place with which the social order, adapted to earlier economic conditions, is no longer in keeping. From this it also follows that the means of getting rid of the incongruities that have been brought to light must also be present, in a more or less developed condition, within the changed modes of production themselves. These means are not to be invented, spun out of the head, but discovered with the aid of the head in the existing material facts of production.^[1]

The publication of Capital in 1867 provided the working class with an understanding of the laws governing the capitalist mode of production. Though several years were to pass before Marx’s masterwork gained the attention of a significant working class audience, Capital established the scientific foundation for the development of the modern socialist movement. As wider sections of the working class, especially in Germany, came under the influence of Marxism, the social and theoretical foundations emerged for the establishment of mass socialist parties throughout Europe. The formation of the Second International in 1889 was a milestone in the struggle for the political unity of the international working class. It rested on objective foundations far more mature, in terms of the development of capitalism and the industrial working class, than those that had existed when Marx and Engels founded the First International in 1864. The period between 1876, when the First International was dissolved, and 1889 witnessed an immense growth in capitalism and the industrial proletariat. The next quarter century was characterized by contradictory tendencies in the social, economic and political development of capitalism and the international workers’ movement. On the surface, economic growth and political stability were the dominant features of the period. Within this framework, the growth of the organized workers’ movement, especially in Western Europe, proceeded along parliamentary and trade union lines. However, beneath the apparent stability of the political and economic order, immense internal pressures were building up. The development of imperialism in the last decade of the 19th century and the first decade of the 20th century was accompanied by an escalation of dangerous rivalries among the major capitalist states. At the same time, economic strains were undermining the foundations of class compromise and causing an intensification of social tensions.

This contradictory development underlay the tensions within the Second International, and the German Social-Democratic Party (SPD) in particular. The official doctrine of the SPD was that of class war, but its growth was bound up with the expansion of German capitalism and national industry, which brought with it the strengthening of the proletariat and the trade unions. The period of capitalist growth allowed the bourgeoisie to cultivate a section of the working class and trade union bureaucracy (what Lenin later called the “labor aristocracy”), integrating its interests with the capitalist system. This was the foundation for the growth of opportunism within the Second International, manifested in every country. This opportunism found its most developed theoretical expression in the writings of Eduard Bernstein, who rejected the Marxist analysis of the contradictions of the capitalist system and their revolutionary implications. Bernstein also rejected the scientific basis of Marxist theory, and argued that socialism should be viewed as a moral ideal that had no necessary material relationship to the laws of capitalist development. These arguments reflected the widespread influence of various forms of subjective idealist philosophy, especially neo-Kantianism, which opposed Marxian materialism.

The strength of the revisionist anti-Marxist tendencies did not reflect the intellectual power of their arguments, which were inconsistent and impressionistic. Rather, revisionism developed in a period of rapid economic expansion and rising living standards in Europe that provided the working class, though led by socialists, with no opportunity for a revolutionary assault on capitalist society. Thus, a strange dualism arose within the social-democratic movement, especially in Germany. Its leaders employed the language of revolutionary Marxism, but the daily practical work of the party proceeded within the boundaries of reformism. Bernstein’s formulations reflected and justified this reformist character of the daily practice of the German Social Democratic Party and the trade unions. The political implications of his theoretical revisions found expression in France, in 1899, when the socialist leader Millerand became a minister in a bourgeois government.