Internationalization of Capital

The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Internationalization of Capital


the expansion of the sphere of activity of capital beyond the borders of a state, which involves the establishment by individual national companies of their own affiliates or other economic units in foreign states and the development of relations and connections among capital of various countries.

The objective basis of internationalization of capital consists of economic links between capitalist countries, an expansion of the international division of labor, and the internationalization of production. The broad development of internationalization of capital takes place in the monopoly stage of capitalism. The most typical expression of this process is the transformation of the largest national trusts and concerns of the leading countries of financial capital into international monopolies, which divide the capitalist world market. The migration of capital between the developed capitalist countries, which intensified in the late 1950’s and early 1960’s, has increased the process.

Taking over an ever-larger share of the production of particular goods in their own country, monopolies strive to seize control of the production of these goods in other countries as well, resulting in the concentration in their hands of a considerable part of the world production of such types of commodities. At the end of the 1960’s, about half the assets of the largest American oil companies, such as Standard Oil of New Jersey and Mobil Oil, were outside the borders of the USA. The British chemical concern Imperial Chemical Industries concentrated 32 percent of its production outside Great Britain.

An important trend in the internationalization of capital is a mutual interweaving of capital of companies of various capitalist countries. The interests of monopolistic groups of the USA, Great Britain, West Germany, France, and other countries are represented in some of the largest companies. Thus, in the mid-1960’s, US companies owned 33 percent of the share capital of the electrotechnical concern Philips (which is controlled by Dutch capital), French companies owned 10 percent, Swiss companies owned 9 percent, and West German companies owned 2 percent.

Another form of unification of the largest companies of various countries is their formation of joint subsidiaries. The British chemical concern Imperial Chemical Industries and the American aluminum monopoly ALCOA jointly created the company IMPALCO for aluminum smelting in Great Britain.

American, British, and Japanese capital and the capital of other countries form international investment trusts, which specialize in the purchase and sale of shares of companies of various countries. International licensing agreements have become a new form of creating tight bonds between the companies of different countries.

Internationalization of capital is one of the most important factors in strengthening the integration processes in the capitalist world. Objectively, internationalization of capital leads to an ever-greater socialization of production on a world scale and at the same time intensifies contradictions between individual companies or groups of companies of various countries in the struggle for markets, sources of raw materials, and spheres for investment of capital.


Lenin, V. I. “Kriticheskie zametki po natsional’nomu voprosu.” Poln. sobr. soch., 5th ed., vol. 24, p. 124.
Lenin, V. I. “O lozunge Soedinennykh Shtatov Evropy.” Ibid., vol. 26.
Lenin, V. I. Imperializm, kak vysshaia stadiia kapitalizma. In ibid., vol. 27, pp. 359–73, 391–94.
Dikanskii, M. G., and V. N. Shil’dkrut. Mezhdunarodnye monopolii. Moscow, 1966.
Faminskii, I. P. Mirovoe kapitalisticheskoe khoziaistvo i uglublenie ego krizisa v sovremennykh usloviiakh. Moscow, 1966. Pages 257–66.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
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