World Capitalist Economy

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 It might be outdated or ideologically biased.

World Capitalist Economy


the aggregate of international economic intercommunications and interrelations of the countries of the nonsocialist world. It includes both advanced capitalist states and economically backward countries. Underlying the system is the dominance of private property in the means of production and bourgeois relations of distribution and exchange. The determining role in the world capitalist economy is that of the production relations arising on the basis of the capitalist mode of production; these relations are mediated in the system through the relationship of the international exchange of goods, financial means, and various kinds of commercial services.

The process of the formation of the world capitalist economy unfolds in two basic directions: the line of capitalist development in depth, that is, through the growth of capitalist production in individual capitalist countries; and the development of capitalism in breadth, chiefly through the spread of the colonial and semicolonial rule of a few capitalist countries to an increasing number of countries and territories. The material wealth expropriated by the bourgeoisie from the dependent countries served as the basis for the process of primitive accumulation of capital in the parent countries.

The long process of formation of the world capitalist economy began in the 16th century and was concluded by the beginning of the 20th century. The merging of industrial capital with banking capital and the establishment of the complete domination of finance capital in the world economy and politics resulted in the ultimate transformation of the world capitalist economy under imperialism into an antagonistic combination of two main groups of countries: the industrially developed capitalist states and the vast number of agrarian, raw-material colonial and dependent countries. By this time, the internal contradictions within the group of industrially developed countries had also intensified sharply; these contradictions were manifested in the struggle for commodity and capital markets. Studying the laws of development of the world economy of the early 20th century, V. I. Lenin exposed the dual monopoly that had become established: first, the monopoly of finance capital in the developed capitalist countries, and second, the monopoly of these few countries over the rest of the world. At a given stage of the development of the world capitalist economy, the concentration of production and of international exchange in the hands of the monopolies became the material basis for the colonial rule of the imperialist powers. The export of capital became one of the most essential features of the world capitalist economy. The combination of precapitalist forms of production with imperialist forms and methods of exploitation deepened the contradictions of the system and resulted in a further increase in the unevenness of development of the system’s various parts, of different countries and regions. This resulted in a crisis for the economic system, a crisis that was an integral part of the general crisis of capitalism.

The beginning of the crisis of the world capitalist economy, its first stage, is characterized by a substantial contraction of the sphere of imperialist dominance of the world economy and by a noticeable weakening of its colonial foundations. The victory of the Great October Socialist Revolution signified (1) the undermining of an important economic basis of imperialism—the territorial division of the world; (2) a sharply narrowed sphere of interimperialist struggle for the economic partition and repartition of the world; and (3) as a result, decreased possibilities of using the export of capital as an all-round means of imperialist expansion on an international scale. The crisis of the colonial system began under the influence of the Great October Socialist Revolution. Within the narrowed framework of the world capitalist economy, the imperialist struggle to partition monopoly spheres of influence continued to grow, although the possibilities for such a struggle were already limited. In its expansionist policies, the finance capital of these powers came into conflict with the need to deal with the relation of forces in the world arena and its changes, which were not to the advantage of finance capital. From 1929 to 1933 the economy of world capitalism was shaken to its foundation by the greatest cyclical crisis of overproduction in its history.

World War II marked the onset of the second stage of the crisis of the world capitalist economy. After the war, a number of new countries of Europe and Asia embarked on the path of socialism, and the process of the formation of the world socialist economic system began. During the first postwar years, the restoration and further development of the international economic ties of capitalism, which had been sharply disrupted by the war, also proceeded; relatively rapid, although unstable and uneven, growth in the productive forces of capitalism was also evident. By the mid-1950’s, the volume of industrial production within the limits of the world capitalist economy (considerably diminished after the war) was more than twice as great as the level of the prewar years; the physical volume of the international goods turnover had grown by nearly two-thirds. But within the framework of the world capitalist economy, narrowed by socialism, imperialism found itself no longer able to determine completely the direction of development of world economics and politics as it had previously, or to rule the destinies of the peoples of many countries of the Third World. After the war, a number of colonies achieved national independence. Their rates of economic growth also accelerated.

The third stage in the crisis of the world capitalist economy, which began to take shape in about the mid-1950’s, proceeded under the condition of the rapid growth of the world socialist economy, the further increase in the unevenness of development of capitalism, and the completion of the disintegration of the greatest colonial empires. The determining factor in the further deepening of the crisis of the world capitalist economy was the rapidly growing might of world socialism. At the same time, a noticeable growth of productive forces was evident in the capitalist world. Between 1955 and 1970, the magnitude of industrial production of the nonsocialist world increased 2.2 times, with an increase of approximately 2.16 times in the developed capitalist countries and nearly 3 times in the developing countries. But such growth in production did not, on the whole, lead to a strengthening of the position of imperialism in the world capitalist economy. Interimperialist contradictions further intensified as a result of the change in the relation of forces between the monopolies of the various countries. The basic antagonism of the capitalist mode of production became steadily aggravated, and on this basis all social antagonisms within the advanced capitalist countries deepened. The expansion of the struggle for true independence of the emancipated countries, the growing might of world socialism, and world socialism’s all-out support of the national liberation movement in the Third World caused the virtual breakdown of the colonial system of imperialism.

All of the aforementioned interconnected processes predetermined the consistent advance of the development of the crisis of the world capitalist economy and a progressive weakening of the hegemony of the finance capital of imperialist powers within the system. Tendencies reflecting the undermining of the monopoly position of imperialism and international economic relations as a result of the rapid growth of economic and technical cooperation among the socialist and developing countries began to acquire particular significance. As a result, imperialism’s ability to use commercial-economic blockades effectively against former colonies and semicolonies is decreasing substantially. Under the new conditions, the colonial policies of the imperialist powers aim at keeping the emancipated countries in an unequal position in the international capitalist division of labor. Even under the conditions of the disintegration of the colonial system of imperialism, the vast gap between the levels of economic development of the two main groups of countries remains a feature of the greatest importance in the structure of the world capitalist economy. Less than one-sixth of the aggregate gross product of the world capitalist economy is produced in the Third World, although more than two-thirds of the population of the non-socialist countries is concentrated there.

Fundamental changes in the economy of world capitalism have been occurring in a crucial branch of material production —industry, a branch characterized by a sharp increase in the unevenness of the rate of development of individual leading branches under the influence of scientific and technical progress. The following long-term tendencies in the structure of industry have come to light: (1) the noticeable decline, on the whole, of the extractive branches; (2) the comparatively slow growth rates of light industry and the corresponding drop in its relative role; (3) a sharp increase in the role of most branches of heavy industry, whose share in the total volume of industrial production of the world capitalist economy reached 57 percent in the early 1970’s, whereas it had been about 40 percent at the end of the 1930’s; and (4) the growing importance of the energy industry, whose share has correspondingly increased from 4 to 8 percent.

The growth in the role of heavy industry has been particularly marked in the course of the modern scientific and technical revolution, which embraces primarily the most monopolized sectors of the world capitalist economy. The comparatively rapid growth of these sectors predetermines the nature and characteristics of the expansion of the international capitalist division of labor, as well as a noticeable enhancement of the relative role of the industrially developed countries. The overall increase in the physical volume of the goods turnover on the world capitalist market was 2.9 times from 1955 to 1970, and the share of these countries in this turnover increased from 75 to 81 percent. In the economy of the Third World, processes that in turn are beginning to influence the structure of the international division of labor have also taken shape. These processes are bound up primarily with the appreciable acceleration of the growth rates of industry in the countries of the agrarian, raw-material periphery of the world capitalist economy. Consequently, the volume of their industrial production as a whole increased 3.2 times from 1955 to 1970. It was, fundamentally, precisely in the sphere of industrial production that the disintegration of the colonial system began to influence the structure of the international capitalist division of labor.

In the context of the deepening of the crisis of the world capitalist economy, characteristic changes in agriculture, the other major sphere of material production, have also been taking place. The scope of these changes has been considerably smaller than in industry, a reflection of one of the most general and profound contradictions of the capitalist mode of production— that between industry and agriculture. The total volume of agricultural production within the contemporary nonsocialist world increased by 45 percent between 1955 and 1970; in 1970 it was slightly more than double the average level of 1934-38. When population growth is taken into account, the growth of per capita agricultural output was insignificant. In the early 1970’s, agricultural production averaged 18-20 percent higher than in the early 1950’s, with the increase coming primarily from the developed capitalist countries.

Advances in the sphere of material production to an important degree predetermined the characteristics of development of the international division of labor under contemporary capitalism. The disproportionate growth of the main branches of industry and agriculture led to a still greater imbalance in the development of various orientations in international goods turnover, on the whole and also within individual groups of countries. Competition and the struggle for markets and spheres of capital investment continue to grow among the imperialist states and among the monopolies and their allies. Measures with respect to the economic partition of the world capitalist economy become increasingly state-monopolistic in nature. At the same time, the tendency toward imperialist integration is gathering force. This is a tendency that accelerates the breakup of interstate economic partitions and increases the degree of socialization of production. But along with this, the objectively progressive process of the economic rapprochement of nations develops, as previously, in extremely distorted forms. Competing commercial-economic blocs are created—blocs that are alliances of the financial oligarchy for joint onslaughts against the position of the toiling people and for the economic subjugation and exploitation of the developing countries. The further deepening of the irreconcilable antagonisms of the world capitalist economic system is reflected in the growing disorganization of its currency and financial system. The crisis of this structure has turned into one of the most important currents of the general crisis of the capitalist world— increasing inflation, uneven balances of payments, and the expansion of currency restrictions.

State-monopoly capitalism uses every means to strengthen the capitalist world economy: the functions of the state are expanded to cover the primary areas of economic life of capitalist society, and the role of programming and regulating the world capitalist economy is enhanced.

The tasks of the socioeconomic progress of humanity and of the accelerated growth of its productive forces in the contemporary era demand with ever-increasing urgency the liquidation of the world system of economic exploitation of some countries by others and the creation of a genuinely equitable international division of labor—an all-embracing system of world economic relations that would respond to the vital interests of human society.


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Lenin, V. I. “K kharakteristike ekonomicheskogo romantizma.” Poln. sobr. soch., 5th ed., vol. 2.
Lenin, V. I. “Imperializm, kak vysshaia stadiia kapitalizma.” Ibid., vol. 27.
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The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
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