1. ANARCHIC STRUCTURE OF WORLD ECONOMY. 2. INTERNATIONAL SYNDICATES AND CARTELS. 3. INTERNATIONAL TRUSTS. 4. INTERNATIONAL BANK SYNDICATES. 5. NATURE OF INTERNATIONAL, PURELY CAPITALIST ORGANISATIONS. 6. INTERNATIONALISATION OF ECONOMIC LIFE AND INTERNATIONALISATION OF CAPITALIST INTERESTS.
World economy in our times is characterised by its highly modern anarchic structure. In this respect the structure of world economy may be compared with the structure of "national" economies typical till the beginning of this century, when the organisation process, briskly coming to the fore in the last years of the nineteenth century, brought about substantial changes by considerably narrowing the hitherto unhampered "free play of economic forces." This anarchic structure of world capitalism is expressed in two facts: world industrial crises on the one hand, wars on the other.
It is a profound error to think, as the bourgeois economists do, that the elimination of free competition and its replacement by capitalist monopolies would do away with industrial crises. Such economists forget one "trifle," namely, that the economic activities of a "national" economy are now conducted with a view towards world economy. As to the latter, it is by no means an arithmetical total of "national" economies, just as a "national" economy is by no means an arithmetical total of individual economies within the boundaries of the state territory. In either case, there is a very substantial element supplementing all the others, namely, connections, reciprocal action, a specific medium which Rodbertus called "economic communication," without which there is no "real entity," no "system," no social economy, only isolated economic units. This is why, even if free competition were entirely eliminated within the boundaries of "national economies," crises would still continue, as there would remain the anarchically established connections between the "national" bodies, i. e., there would still remain the anarchic structure of world economy.1)
What was said about crises is true also about wars. War in capitalist society is only one of the methods of capitalist competition, when the latter extends to the sphere of world economy. This is why war is an immanent law of a society producing goods under the pressure of the blind laws of a spontaneously developing world market, but it cannot be the law of a society that consciously regulates the process of production and distribution.
Still, notwithstanding the fact that modern world economy as a whole represents an anarchic structure, the process of organisation is making strides even here, expressing itself mainly in the growth of international syndicates, cartels, and trusts. We shall, first of all, undertake a general survey of these formations of modern times.
In the transport industry the largest cartels are (barring the changes brought about by the war): 1) the Sailing Shipowners Documentary Committee (English, German, Norwegian and Danish maritime societies); 2) the Internationale Segelschiffahrtkonvention (English, German, Danish, Swedish and Norwegian sail boats); 3) the Baltic and White Sea Conference embracing from 60 to 70 per cent of the total Baltic and White Sea tonnage (combining Germans, Frenchmen, Dutchmen, Englishmen, Spaniards, Belgians, Danes, Norwegians, Swedes, Russians, and Finns); 4) the Internationaler Küstenschiffahrtsverband, Altona; 5) the Nordatlantischer Dampferlinienverband (Germans, Americans, Belgians, Frenchmen, and Austrians); 6) the International Mercantile Marine Company, alias The Morgan Trust (mainly Americans, Englishmen, and Germans) which, by the end of 1911, owned 130 steamships with a gross tonnage of 1,158,270 tons. Outside of these cartels of a higher type, there exists a number of important agreements as to the regulation of freight rates, rebates, etc.
In the mining and metallurgic industries: 1) the Internationales Trägerkartell (steel syndicates of Germany, Belgium and France); the Internationales Schienenkartell (German, English, French, Belgian, American, Spanish, Italian, Austrian, and Russian rail works); 3) the Internationale Stahlkonvention (the American Steel Trust, the Bethlehem Steel Company, and the Krupp firm); 4) the Internationale Bleikonvention (German, Australian, Belgian, American, Mexican and English lead manufacturers); 5) the Deutsch‑Oesterreichischer Stahlgussverband; 6) the Deutsch-Englische Ferromanganeisenkonvention; 7) the Internationale Vereinigung von Ferrasiliziumwerke (Norwegians, Swiss, Tyrolians, Bosnians, Savoyians, and Germans); 8) the Internationales Metallplattensyndikat (Germans and Austrians); 9)the Vereinigung der Zinkplattenfabrikanten (Englishmen and Americans; very influential in the world market); 10) the Internationale Zinkkonvention (Germans, Belgians, Frenchmen, Italians, Spaniards, Englishmen, and Americans; controls 92 per cent of the European output); 11) Internationaler Zinkhüttenverband (Germans, Frenchmen, Belgians, Englishmen); 12) Internationales Drahtgeflechtekartell (Germans, Belgians, Frenchmen, Englishmen); 13) Internationales Abkommen der Kupferdrahtziehereien; 14) Deutsch‑Englische Schraubenkonvention; 15) Internationales Emaillekartell (Germans, Austro-Hungarians, Frenchmen, Swiss, Italians); 16) Internationales Turbinensyndikat (mainly Germans and Swiss); l7) Vereinigte Dampfturbinengesellschaft (German A‑E‑G, American General Electric Co. and other firms); 18) Automobiltrust (Motor Trade Association and nearly all the outstanding European automobile enterprises); 19) Russisch‑Deutsch‑Oesterreichisches Syndikat für landwirtschaftliche Geräte; 20) Internationale Vereinigung von Eisenwarenhändlerverbänden (Germans, Englishmen, Frenchmen, Austro‑Hungarians, Swiss, Belgians); 21) Internationaler Verband der Korsettschliessen and Federnfabriken (nearly all large factories, in existence).
The stone, clay, etc,, industry has six large international cartels.
In the electrical industry, as we have noted above, the process of the internationalisation of production finds its most salient expression. There are several very large international agreements in existence. The largest are: 1) an agreement between the German A‑E‑G, the American General Electric Company, and the British‑French Thomson Houston Company, the organisation having a network of enterprises spread over every part of the world; 2) Internationales Galvanosteginsyndikat; 3) Verkaufstelle Vereinigter Glühlampenfabriken (Germans, AustroHungarians, Swedes, Dutch, Italians, Swiss); there are, besides, numerous special agreements between banks concerning the financing of electric enterprises etc.
In the chemical industry, international cartelisation has become pronounced, mainly in a number of particular fields. The more important are: 1) Internationales Chlorkalk‑kartell (Germans, Frenchmen, Belgians, Englishmen, Americans); 2) Internationales Leimkartell (glue factories in Austria‑Hungary, Germany, Holland, Belgium, Sweden, Denmark, and Italy, sales office in London); 3) Internationales Boraxkartell (Germans, Americans, Frenchmen, Austro‑Hungarians, Englishmen); 4) Internationaler Verband der Seidenfärbereien (German, Swiss, French, Italian, Austrian and American associations of dyers); 5) Internationales Karbidsyndikat (all European); 6) Internationales Pulverkartell; 7) Deutsch‑Oesterreichischer Superfosphatkartell; 8) Kartell der Belgisch‑Holländischen Oleinproduzenten; 9) Internationale Verkaufsvereinigung Stickstoffdünger (German, Norwegian, Italian, and Swiss factories of nitrate fertiliser); 10) Internationales Kerosinkartell (Standard Oil Company and Russian firms); 11) Verband Deutsch‑OesterreichischItalienischer Kipsgerber and Kipshändler; 12) Internationales Salpetersyndikat; 13) Internationales Koalinverkaufsyndikat (Austro‑Germans); 14) Europäische Petroleumunion (Germans, Englishmen, Swiss, Dutch, Belgians, Austrians, Danes, Americans, East‑Asiatic oil producers).
In the textile industry the international agreements concern themselves mainly with special branches of production: 1) the International Federation of Master Cotton Spinners and Manufacturers Association (representing the continental‑European and American industry); 2) Deutsch‑Oesterreichisches Kravatenstoffkartell; 3) Internationales Samtindustriekartell (all the German and French velvet factories); 4) Kunstseide Verkaufskontor (German and Belgian factories of artificial silk); 5) International Cotton Mills Corporation (U. S. A. and the rest of America); 6) Konvention der deutschen and schweizerischen Seidencachenezfabrikanten; 7) Verband der deutsch‑schweizerischen Cachenez‑ and Kravattenfabrikanten; 8) Oesterreichisch‑Deutsches Jutekartell; 9) Internationaler Verband der Kratzenfabriken (Germans, Luxemburgians, Belgians, Dutch, Austro‑Hungarians, Swedes, Norwegians, Danes, Balkanites); 10) Internationale Nähseidekonvention (Austrian, Belgian, Russian, Spanish and English enterprises); 11) Internationale Vereinigung der Flachs‑ and Werggarnspinner (nearly all the large flax spinners of Europe); 12) Internationales Kartell der Schappenspinner.
In the glass and china industry, the largest international organisation is the Europäischer Verband der Flaschenfabrikanten (embracing nearly all the European countries); also a number of large glass and china cartels.
The paper industry numbers seven large international cartels.
Ten other agreements concerning six different industries (rubber, cabinetmaking, cork, cocoa, etc.) are also known to exist.2)
Besides the above mentioned cartels, there exist hundreds of international trusts (mergers and controlling organisations). We shall mention here only the most outstanding, i.e., such as have the greatest economic weight in the world market.
Such a trust is the Standard Oil Company of New Jersey which, in 1910, owned the shares of 62 companies (including the Anglo‑American Oil Company, the Deutsch‑Amerikanische Petroleumgesellschaft, and the Romana‑Americana) and was connected with a very large number of enterprises and companies (Dutch, German, French, Swedish, Italian, Russian, Swiss, etc.).3) The trust "controls" the Amalgamated Copper Company which is intent on acquiring a world monopoly in the production of copper. Another large trust is the United States Steel Corporation, the largest "controlling company" in the world. Of the other trusts, the outstanding are: Reisemühlen und Handelsaktiengesellschaft in Barmen, with foreign participation equalling 6,039,344 marks;4) the Internationale Bohrgesellschaft; the Nobel Trust Company; a number of international trusts in the petroleum industry; the banana trust organised by the Boston Fruit Company and the Tropical Trading and Transport Company; the packing trust; the sewing thread trust with the English firm of J. and P. Coats, Ltd., at its head; the Société Centrale de la Dynamite; Compagnie Générale de la Conduits d'Eau (Lüttich) which "controls" enterprises in Utrecht, Barcelona, Paris, Naples, Charleroi, Vienna; the Trust metallurgique beige‑franqais, etc., etc.5)
Behind all these cartels and trusts, as a rule, stand the enterprises that finance them, i.e., primarily the banks. The internationalisation process whose most primitive form is the exchange of commodities and whose highest organisational stage is the international trust, has also called into being a very considerable internationalisation of banking capital in so far as the latter is transformed into industrial capital (by financing industrial enterprises), and in so far as it thus forms a special category: finance capital.
It is finance capital that appears to be the all‑pervading form of capital, that form which, like nature, suffers from a horror vacui, since it rushes to fill every "vacuum," whether in a "tropical," "subtropical," or "polar" region, if only profits flow in sufficient quantities. We quote below a number of examples of gigantic international banking trusts to illustrate the friendly "mutual aid" given by the large "national" banks to one another.
In 1911, a finance trust, the Société financiere des valeurs américaines, was organised at Brussels with the aim of financing American enterprises. It included the Deutsche Bank and the firm of Warburg Company in Hamburg, the Société Générale in Brussels, the Banque de Bruxelles, the Banque de Paris et de Pays‑Bas, the Société Générale pour favoriser l'industrie nationale in Paris, the Société Francais de banques et de dépôts, the Banque Francaise pour le Commerce et l'Industrie, Kuhn‑Loeb Company, New York, etc., etc.‑all of them belonging to the largest banks of the world.6) The Deutsche Bank that forms part of that "finance trust," organises, together with the Schweizerische Kreditanstalt and the SpeyerEllissen firm, the Aktiengesellschaft für überseeische Bauunternehmungen for the purpose of organising building enterprises on the other side of the ocean; it organises centres for the sale of kerosene in several countries; it forms an alliance with the Russian firm of Nobel; it participates in the European Kerosene Union.7) Not so long ago, a banking trust (Consortium Constantinopel) was organised in Brussels for the purpose of financing enterprises in Constantinople. It includes the Deutsche Bank, the Deutsche Orientbank (connected with the former), the Dresdner Bank, the Schaffhausenscher Bankverein, the Nationalbank, the Société Générale in Paris, the Banque de Paris, the Comptoir National, the Schweizerische Kreditanstalt, and the Bank für elektrische Unternehmungen.8) A special railroad bank is organised in Belgium (the Banque belge de chemins de fer) with the aid of the Banque de Paris et de Pays‑Bas, the Wiener Bankverein, the Schweizerische Kreditanstalt, the Société Générale des chemins de fer économiques, the Deutsche Bank, the Dresdner Bank, etc., i.e., with the aid of an international banking trust. One more example: the Russian Metal Syndicate was aided by four groups of "national" banks‑the Russian group (Asov Commerce Bank, St. Petersburg International Commerce Bank, Russian Foreign Commerce Bank, Russo‑Asiatic Bank, and Commerce Bank in Warsaw); the French group (Credit Lyonnais, Banque de Paris et de Pays‑Bas, Société Générale the German group (Deutsche Bank, Bank für Handel and Industrie, and Dresdner Bank); and the Belgian group (Credit General à Liege, Société Générale de Belgique, Nagelmärkers fils à Liege).9)
It would be a great error to think that all these examples are accidental exceptions. Economic life is teeming with them. Colonial enterprises, and the export of capital to other continents, railway construction and state loans, city railways and ammunition firms, gold mines and rubber plantations, all are intrinsically connected with the activities of international banking trusts. International economic relations are extended through countless threads; they pass through thousands of cross‑points; they are intertwined in thousands of groups, finally converging in the agreements of the largest world banks which have stretched out their tentacles over the entire globe. World finance capitalism and the internationally organised domination of the banks are one of the undeniable facts of economic reality.
On the other hand, one must not overestimate the significance of international organisations. Their specific weight compared with the immensity of the economic life of world capitalism is by no means as great as would appear at the first glance. Many of them (i.e., of the syndicates and cartels) are only agreements concerning the division of markets Rayonierungskartelle); in a series of large subdivisions of social economy they embrace only very specific branches of production (such as the bottle syndicate which is one of the strongest); many of them are of a highly unstable nature. Only those international agreements which are based on a natural monopoly are possessed of a greater degree of stability. Still, there is a tendency towards a continuous growth of international formations, and this growth cannot be ignored when analysing the development of modern world economy.10)
We have pursued the main tendencies in the growth of world economy from the exchange of commodities up to the activities of international banking syndicates. This process in all its ramified forms is the process of the internationalisation of economic life; the process of bringing separate geographic points of economic development closer to each other; the process of reducing capitalist relations to one level; the process of the growing contrast on the one hand between concentrated property in the hands of the world capitalist class, and on the other, the world proletariat. It does not follow from this, however, that social progress has already reached a stage where "national" states can co‑exist harmoniously. For the process of the internationalisation of economic life is by no means identical with the process of the internationalisation of capital interests. A Hungarian economist was perfectly right when he remarked concerning the works of the English pacifist, Norman Angell, that "he" (i.e., "forgets only one thing: that there are classes both in Germany and England, and that the thing that may be superfluous, useless, even harmful, for the people as a whole, can be of very great benefit (sehr gewinnbringend sein kann)for individual groups (large financiers, cartels, bureaucracy, etc.)."11) This proposition can, of course, be applied to all states, for their class structure is beyond any doubt, at least from a purely scientific point of view. This is why only those who do not see the contradictions in capitalist development, who good‑naturedly assume the internationalisation of economic life to be an Internationale der Tatsachen, i.e., those who assume anarchic internationalisation to be organised internationalisation‑can hope for the possibility of reconciling the "national" capitalist groups in the "higher unity" of peaceful capitalism. In reality things take place in a much more complicated way than appears to the opportunist optimists. The process of the internationalisation of economic life can and does sharpen, to a high degree, the conflict of interests among the various "national" groups of the bourgeoisie. Indeed, the growth of international commodity exchange is by no means connected with the growth of "solidarity" between the exchanging groups. On the contrary, it can be accompanied by the growth of the most desperate competition, by a life and death struggle. The same is true of the export of capital. "Community of interests" is not always created in this field. Competitive struggle for the spheres of capital investment may here, too, reach a highly acute state. There is only one case in which we can say with assurance that solidarity of interests is created. This is the case of growing "participation" and financing, i.e., when, due to the common ownership of securities, the class of capitalists of various countries possesses collective property in one and the same object. Here we actually have before us the formation of a golden international; 12) there is apparent here, not a simple similarity or, as one is wont to say at present, a "parallelism" of interests; there is actual unity here; but the course of economic development creates, parallel to this process, a reverse tendency towards the nationalisation of capitalist interests. And human society as a whole, placed under the iron heel of world capital, pays tribute to this contradiction‑in unbelievable torment, blood, and filth.
The perspectives of development can be pointed out only after analysing all the main tendencies of capitalism. And since the internationalisation of capitalist interests expresses only one side of the internationalisation of economic life, it is necessary to review also its other side, namely, that process of the nationalisation of capitalist interests which most strikingly expresses the anarchy of capitalist competition within the boundaries of world economy, a process that leads to the greatest convulsions and catastrophes, to the greatest waste of human energy, and most forcefully raises the problem of establishing new forms of social life.
We are thus confronted with the task of analysing the process of the nationalisation of capital.
1) This is beginning to dawn even upon bourgeois writers. Thus Mr. Goldstein says: "That the cartels and trusts are in no position to eliminate crises, is seen, among other things, from the fact that the steel trust, in whose hands, including affiliated enterprises, something like 90 per cent of the U. S. production of steel were concentrated, utilised by the end of the first quarter of 1908 only one‑half of the production capacity of its plants, etc." (I. M. Goldstein: Syndicates, Trusts, and Modern Economic Policies, second edition, Moscow, 1912, p. 5, footnote). Cf. also Tugan Baranovsky: Industrial Crises.
2) The list of international cartels is here reproduced from the above quoted book by Harms (p. 254 ff.) . We quote this list as well as the list of international trusts and bank syndicates because, as far as we know, there is no Russian literature dealing with the question.
3) Liefmann, IX., p. 249 ff.
4) Ibid., p. 275.
5) Kobatsch, l.c.; Liefmann, l.c.; Harms, l.c.
6) Liefmann, l.c. p. 174.
7) Liefmann, l.c. pp. 456-458.
8) Ibid., pp. 497-498.
9) Zagorsky: Syndicates and Trusts, p. 230. We mention only private international economic agreements. It is assumed that state agreements, playing an immense economic part (like the International Postal Alliance, the railroad agreements, etc.), are known to the reader.
10) Sartorius von Waltershausen puts a very low estimate on the part played by international organisations. Compare l.c., p. 100: "That there should be created, and there should exist, international companies with centralised [einheitlicher] management of production appears unlikely. But, of course, one may expect that there would be agreements between large national companies concerning the distribution of the selling markets." The opposite point of view is maintained by Harms.
11) Erwin Szabo: "Krieg und Wirtschaftsverfassung," in Archiv für Sozialsvissenschaft und Sozialpolitik, 39. Bd., 3. Heft, pp. 647‑648.
12) How the ideologists of the present‑day bourgeoisie view this golden international (we do not speak, of course, of the contradistinction between the "top" and the "bottom") may be seen from the following statement by Sartorius: "The golden 'international' can never be an ideal for a man who has a fatherland, and who believes that in that fatherland are sunk the roots of his existence" l.c., p. 14). This in turn shows the comparative weakness of the process of the internationalisation of capitalist interests.