Monopoly Capital goes to War

How Bukharin's theory of imperialism explains Trump's foreign policy.

Venezuela is one of those foreign adventures in which the US’ motives are not in any doubt. Trump has repeatedly told us that it’s all about oil. He has indicated that U.S. oil companies will be brought in to exploit Venezuela’s natural resources, and those companies are demanding profit guarantees – which Trump has been all too willing to provide.

None of this – the foreign wars, the corporate welfare, the naked exploitation – is unusual for American capitalism. All capitalist economies are, as I argued in Vulture Capitalism, built on close cooperation between large monopolistic corporations, financial institutions, and the state, often resulting in imperialist (mis)adventures abroad. What’s unusual about Trump is how overtly he embraces the logic of imperialism.

Trump has made no secret of his disdain for the so called ‘liberal rules-based order’. That order was already under strain before he took office: Western powers repeatedly invaded states in the global South despite rhetorical commitments to sovereignty; and unfair lending programs and trade agreements had eroded the legitimacy of the Washington Consensus long before the financial crisis of 2008.

The inherent weakness of neoliberal globalisation made it easy for Trump to break with the liberal order and return to older traditions of mercantilism and territorial competition. Yet this rhetorical break obscures deeper continuities in US imperialism over the course of the last century. Trump’s actions have revealed a much deeper truth: capitalism and imperialism go hand in hand. But now, the ruling class is no longer trying to hide it.

Bukharin, Monopoly Capital, and Imperialism

As Trump’s trade war has dragged on and his foreign policy has taken shape, I’ve been repeatedly reminded of the work of Nikolai Bukharin. In Imperialism and World Economy, Bukharin – writing during the First World War – argued that imperialism is the inevitable outcome of monopoly capitalism.

In Capital, Marx showed that capitalist economies inevitably tend towards monopoly. As production becomes more complex, capitalists have to invest in more machinery and equipment to compete with established giants, creating barriers to entry that benefit large incumbents. Big businesses also tend to be more competitive than smaller ones – they benefit from ‘economies of scale’. So, capital comes to be concentrated in fewer hands, leading to monopoly.

As these monopolistic corporations grow, they develop closer relationships with financial institutions, which provide the financing and technical expertise the corporations need to grow. Over time, the interests of the corporate executives and the financiers grow more similar - a process described by Rudolph Hilferding, one of Bukharin’s contemporaries, as ‘financialization’.

These financialised mega-corporations inevitably develop close relationships with states. They sponsor politicians, influence party platforms, and embed themselves within regulatory structures. Powerful lobbying groups – from the CBI in the U.K. to corporate PACs in the U.S. – gain a seat at the table of government, shaping policy in their interests.

This nexus of corporate, financial, and political power is monopoly capital – and it lays the groundwork for imperialism. The state became the defender of its national monopolies abroad, deploying economic and political power to protect and promote corporate interests. Corporations in turn become instruments of state power, advancing the strategic goals of the national ruling class.

Economic rivalry between firms is transposed into geopolitical rivalry between states. This rivalry culminates in conflict between powerful blocs – like the US and China – as well as invasions of smaller states caught in the middle – like Venezuela and Greenland. But these battles are only the most violent edges of expressions of conflicts embedded in international relations under capitalism.

When the IMF and the World Bank force highly indebted poor countries to open up their economies to western multinationals or face the loss of finance, that’s imperialism. When a powerful state forces a poorer one to sign a one-sided trade agreement, preventing the poor country from accessing generic drugs, seeds, and critical technology, that’s imperialism. When an American company sues a foreign government for implementing policies that dent its profits in a secretive international court, that’s imperialism.

Imperialism, Trump Style

Trump’s invasion of Venezuela is simply the latest battle in a much larger war being waged by capital – centred in the US – on people and planet.

The trade war with China is really a war over technology – in other words, it’s a war over the future of capitalist production. The central battleground is not textiles or steel, but the cutting-edge technologies that underpin twenty-first century production: semiconductors, artificial intelligence, quantum computing, biotech, green tech.

As I explained in this piece, without control over the commanding heights of the global economy, the American empire risks being overtaken by a rising China. Trump’s strategy is to prevent that by binding Silicon Valley to the state in a national-capitalist bloc, waging economic war abroad while consolidating corporate power at home. That’s why he took a stake in Intel – and it’s also why Biden introduced the CHIPS act.

Another front has opened up in the global financial system, where the US’ most formidable weapon is its currency. The US has the ‘exorbitant privilege’ of printing the world’s reserve currency, which allows it to run both fiscal and trade deficits. Everyone needs dollars and – one way or another – dollars come from the Fed. So, the Fed plays a massive role in the operation of global finance.

Trump is trying to use the dollar as part of his trade war with China, pushing for the devaluation of the currency to boost the competitiveness of US exports and discourage Chinese imports – much as China has done for decades. He’s been remarkably successful in his push for dollar devaluation – but the effects haven’t been quite what he expected (more on this soon…) And, as I explained in this piece, challenges to the dominance of the dollar are mounting.

The invasion of Venezuela is a military front in Trump’s imperialist project. As I argued last week, the war is about securing US oil production in the face of growing Chinese energy independence. His threats to Greenland, and his negotiations over Ukraine, are about accessing the rare earth metals required for all the high-tech industries that Trump wants to dominate. China’s total dominance over these rare earths is why his trade war has failed so far – as soon as Chinese threatened to cut off US tech companies from rare earths, Trump was forced to back down.

Empire for the many

The echoes of Bukharin are unmistakable. What we are witnessing is the attempted fusion of state power with corporate power – what Bukharin called the rise of “state-capitalist trusts.” Apple, Nvidia, and Google – not to mention Chevron and Exxon Mobil – are not merely private firms competing in markets; they are cogs in an imperialist machine designed to extract value from workers in the poor world and concentrate it in the hands of capitalists in the rich world.

The shift towards mercantilism seen under Trump represents only a rhetorical break with the policy of previous administrations. Biden, Obama, Bush, all spearheaded imperialist interventions – whether outright wars, one-sided trade deals, or the manipulation of global rules and institutions. The difference is that Trump is doing so loudly and unashamedly – because he believes he can convince the American people that imperialism is in their interests, not just the interests of US capital.

This strategy only works so long as there is no viable political alternative. The Democrats are content to act as capital’s B team, refusing to frame the affordability crisis as a crisis of corporate greed and instead reaching for unconvincing, technocratic arguments grounded in supply-side economics. Were the Dems to wake up and start calling out the corporate capture of the American state, Trump’s project would lose much of its popular appeal.

Some Americans might be willing to send their kids to die in foreign wars waged to protect America’s ‘national interest’. No one would be willing to send their kids to die in a war waged to enrich fossil fuel executives. For elites, these justifications are interchangeable – whatever enriches US companies is good for the country. But for the vast majority of people, they’re not. Only a politician willing to expose this discrepancy could challenge Trump.