Monopoly Capital

February 18, 2015

The war program of the U.S. government is a product of the all-sided crisis and decay of the present day capitalist system. Thus, to get to the root of the problem, and to clearly understand how to advance and win our struggle against war, we must look into the fundamental laws of motion of U.S. capitalism today.

In the U.S., capitalism long ago reached the stage of monopoly.  Monopolies arose as the inevitable result of the process of concentration and centralization of capital, which is a general and fundamental law of the development of capitalism. Monopolization means that instead of tens of thousands of small enterprises competing against one another, a handful of giant corporations dominate every sector of industry. The big monopolies employ hundreds of thousands, even millions of workers, control nearly the entire sources of raw materials as well as dominate the entire internal market.

For example the top 50 industrial corporations had revenues in 2006 of over $5 trillion, nearly 1/3 of the gross national product of the country. In every sector of industry a handful of giant monopolies control the market – half a dozen oil companies, half a dozen auto companies, three aerospace companies etc. and so forth.

Side-by-side with the monopolization of industry, banks and other financial institutions have also been monopolized – controlling trillions of dollars in capital. Through the floating of stocks, bonds, and a network of interlocking corporate directorships, banking capital merges with industrial capital and creates a real financial oligarchy which controls the entire economic life of our country. Some studies have shown that as few as 26 financial groups, groups like the Rockefeller family, the Morgans, the Melons etc. control nearly the whole of the U.S. economy.

At the base, the very foundation of this enormous concentration and centralization of the productive forces of our country is the working-class and socialized labor. The top Fortune 500 companies employ close to 20 million workers and it is their labor, in fact it is the division of labor amongst more than 100 million workers in the country which is the source of our tremendous productive capacity. It is the labor of the people, their socialized labor, which produces all the material blessings.

In other words, development of monopoly capital brings to the bursting point the fundamental contradiction inherent in the capitalist system. The contradiction between collective socialized labor on the one side and private capitalist appropriation of the product on the other. As has been pointed out again and again, the yoke of the monopolies, their domination of the whole economic life, increases the exploitation of the working-class and brings tribute out of the entire population.

Today in the U.S. the rate of exploitation is over 400%. In other words, 4/5 of every working day is expropriated by the capitalists as profit, while the amount the workers receive in wages amounts to only 1/5 of the day’s labor. In one year the top five oil companies alone grabbed enough in profits to increase the wages of every single worker in this country by $1,000. Exxon itself makes profits at the rate of $1,200 every second. 

As part of the process of monopolization the capitalist state more and more steps in to guarantee the profits of the capitalist class as a whole. Through the gigantic military budget, through government grants for infrastructure development and research, through a tax system which redistributes wealth out of the pockets of the workers into the hands of the capitalists, and many other means, the state operates on behalf of the collective interests of the capitalists. The military budget alone amounts to $11,000 for every family of four. 

So too, the state underwrites the profits of the banks through developing a huge national debt. Every year the federal government alone pays in the neighborhood of $300 billion as interest to the bankers and this tribute is extracted from the taxes, the labor of the working people year after year after year.

Today the so-called privatization of governmental services which has become the watchword of the capitalists is really a misnomer. In fact privatization is a process through which the capitalist state takes tax monies out of the working people as well as the economic infrastructure which our country has built up over generations, and turns this over to the capitalists in order to guarantee and increase their profits. Thus for example, the privatization of Medicare, Medicaid or education means that the social fund formerly earmarked for the people for social investment now is used firstly by the capitalists as a source to make profits, and only a small amount left over ends up providing the people with some healthcare, education and so forth. So too it means that the school infrastructure, hospital infrastructure and other social investments which have been created over so many generations, with the intention of guaranteeing the rights of the people, of creating the means necessary for the people to enjoy their economic rights – today this infrastructure is being turned over to the capitalists to be used as another source for profit making.

In fact monopoly capital has come full cycle and returned to the period of the infancy of capital, when capitalism first through primitive accumulation, that is, when the state helped the capitalists accumulate their initial fortunes by direct force, by taking the land from the native peoples, by enslavement. Today too, the capitalist state is striving to put all the wealth of our country at the disposal of the capitalist class.

Summing up the features of monopoly capitalism Stalin writes, “The basic economic law of capitalism is the securing of maximum capitalist profit through the exploitation, ruin and impoverishment of the majority of the population of a given country; through the enslavement and systematic robbery of the peoples of other countries, especially backward countries; and lastly, through wars and militarization of the national economy, which are utilized for the obtaining of the highest profits.”