Capitalism Is War
The need for stable profits and expansion and creation of new markets has led to a terrifying modern reality
At a recent Fighting Oligarchy tour stop in Nampa, Idaho, Bernie Sanders found himself at a bit of a loss for words after some anti-genocide protestors were arrested and removed from the rally. A few minutes earlier, he had railed against Donald Trump’s administration for continuing in the “rather unfortunate behavior of Joe Biden” in providing Israel billions of dollars in military weapons for “Netanyahu’s war machine” (the Israel segment starts at around 2 hr 20 min in). “Like any country, Israel has the right to defend itself” he said “but they do not have the right to wage all-out war against the Palestinian people.” At this, the crowd erupts and it is clear that something is going on as people behind Sanders start looking back. The camera zooms out and shows that several rally attendees have dropped a “Free Palestine” flag over the American flag.
After a few minutes the rally security shows up and starts escorting the people out. At this point Sanders has moved on to talk about domestic affairs in America, but as the protestors are forced out and it appears at least one is arrested, the rally fills with “boos” and Sanders loses a bit of momentum, stumbling over his words as a spontaneous chant of “Free Palestine” breaks out. After a few moments and false starts, Sanders regains control of the rally to talk about the American working class and wealth inequality.
This moment is kind of extraordinary for a couple of reasons. First, this rally is taking place in Nampa Idaho. Idaho is one of the most conservative states in the US. Trump beat Harris there in the 2024 election by 36 points. In Canyon county, where Nampa is located, he got over 70,000 of 101,030 votes cast. This is deep red country, and even though an argument could be made that nearby Boise is a much more blue city or that people were from other cities, only two counties in the whole state went for Harris in the election. The fact that 12,000 people showed up to the rally, and that a significant portion were chanting “Free Palestine” in deep red Idaho indicates that something has shifted in the American political consciousness.
But Sanders couldn’t bring himself to rise to the moment. Much has been made about how his Fighting Oligarchy tour is predominantly focused on American working class issues and how he and AOC appear to be purposely shying away from speaking too much about Gaza in favor of talking about the huge and growing divide between the rich and working class and poor in the US. The wars, when they are mentioned, are evidence of the collapse of an international rules-based order driven by an oligarchy run amok. If the oligarchy could just be put back into its place and taxed appropriately, we could all get back to letting the capitalist order work its magic, ushering in an era of abundance helmed by a Democratic president Kamala Harris, Michelle Obama, or Cory Booker.
But there’s a relationship between the oligarchy running rampant and the neverending wars that the US is involved in all over the world, and it’s not just that Trump’s oligarchs are uniquely unhinged or that the capitalist system has been corrupted. In fact, the growing domestic and international hegemony of the capitalist class—otherwise known as imperialism—is the foregone conclusion of the natural development of capitalism itself. Furthermore, the double need for capitalists to secure stable profits and to expand and capture new markets inevitably pushes the capitalist status quo towards a state of perpetual war.
Capitalism and imperialism
In 1917, Vladimir Lenin published Imperialism, the Highest Stage of Capitalism. Lenin defines imperialism as the stage of capitalism characterized by widescale domestic and international monopolies. Monopolies naturally develop as a function of the competitive aspect of capitalism. Free competition between companies results in larger firms swallowing up smaller firms, until the majority of production in a given area is concentrated in several large firms.
Banks, the same as any other industry, tend towards monopolies under capitalism. When finances become concentrated in monopolies, several large banks end up controlling “almost the whole of the money capital of all the capitalists and small businessmen” as well as controlling the financial backing for any new business ventures. Thus, finance capital becomes joined inextricably to industrial capital
Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists.
The monopolization of capital by banks and their separation from the application of capital to production leads to a situation where profits come not from manufacture and sell of commodities, but from collecting of rents. Once this system arrives, we are not far from the advent of imperialism. According to Lenin
It is characteristic of capitalism in general that the ownership of capital is separated from the application of capital to production, that money capital is separated from industrial or productive capital, and that the rentier who lives entirely on income obtained from money capital, is separated from the entrepreneur and from all who are directly concerned in the management of capital. Imperialism, or the domination of finance capital, is that highest stage of capitalism in which this separation reaches vast proportions. The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy; it means that a small number of financially “powerful” states stand out among all the rest.
Once capital is separated from production, capital itself can be exported and deployed throughout the world. This allows capitalist countries to seed industry development in other countries and to make development conditional upon favorable trade relations or business climates. In centuries past, these relationships were forced upon countries via colonial violence, but political and economic means can prove just as effective in controlling a country
Finance capital has created the epoch of monopolies, and monopolies introduce everywhere monopolist principles: the utilisation of “connections” for profitable transactions takes the place of competition on the open market… The export of capital thus becomes a means of encouraging the export of commodities… Thus finance capital, literally, one might say, spreads its net over all countries of the world.
As in their home countries, the monopolist corporations form international “cartels” or “syndicates” to control and monopolize the international markets, exploit cheap labor, and command the extraction of raw materials. The formation of these international cartels serves to partition the world into separate spheres of capital, and these imperial domains are guarded heavily by their patron countries, with any threat to the hegemony of capital responded to with economic sanctions or military intervention.
Thus, imperialism is defined by Lenin as the monopoly stage of capitalism in which finance capital has become the predominant form of capital and in turn is exported and used by monopolists to divide the world up into territories in which the hegemony of capital is enforced sometimes by violence, but more often by political and economic means.
US monopoly in the 21st century
Lenin was writing at the beginning of the 20th century, and already he had identified the key features of monopoly capitalism, including in the US. Looking around today, we can easily identify these features.
The US has a monopoly problem. Although this chart is a few years old (2018), it demonstrates that the monopolization of industry has increased in the US, with nearly all industries showing mergers and tending towards monopoly.
In addition to the overall monopolization of production, the banking industry in the US is characterized by a high degree of monopolization, as indicated here.
In addition to banks, the US financial system is comprised of a number of other types of operators, including asset managers, hedge funds, venture capitalists, and private equity funds, all of whom play a role in the export and deployment of capital globally.
Since the Second World War a number of international financial institutions have been created, such as the World Bank and the IMF. These organizations, though ostensibly created to foster and support development throughout the world, are heavily controlled by the US, with the US having de-facto veto power on the policies and decisions made by both organizations. Thus they are wielded by the US for its own purposes and interests.
Imperial protection and expansion of markets
Lenin argued that once the world was partitioned into different “spheres of influence” by the imperialist powers, the conflict over resources and markets would cause periodic military conflicts. While Lenin’s focus was on the development of imperialism as a phenomenon of individual states, the globalization of capital has led to a modern state of affairs in which huge multinational corporate monopolies and finance-capital oligarchs control so much of the global economy that states effectively serve as corporate fronts who act at the behest of the corporate class lest the global economy collapse. Particularly in the neoliberal era, the state was transformed into a tool of the capitalist class. While ostensibly about removing state interference from the free market, neoliberal policy in reality harnesses the power of the state to protect corporate interests.
Looking at the history of foreign policy in the US it is clear that the foremost driver of foreign policy and conflict is the protection of US economic interests. When the interests of capital are threatened or require expansion, the US responds first politically and then militarily. From Central America in the early 1900s to Iraq to Gaza today, the purpose of US foreign policy, overt and much more often covert, is to expand, protect, and stabilize US capital markets. The ubiquitous presence of the US military throughout the globe, with between 800 and 1,000 military bases (not to mention those of its NATO allies), a navy capable of launching strikes anywhere in the world at a moment’s notice, and hundreds of thousands of deployed troops, serves as a deterrent to any countries or powers that might challenge the hegemony of US capital.
In addition to military deterrence, the IMF and World Bank provide political leverage over developing nations, as the conditions of their loans often include economic restructuring to allow US capital to access their markets and often to privatize their public assets. These loans are often sought following devastating natural disasters or wars or other conflicts that leave nations ravaged and destitute with nowhere else to turn. Thus, the international financial system serves as an imperial arm of US capital, taking advantage of economic shocks to force open new markets. The World Trade Organization, though its stated purpose is to level the economic playing field for everyone, in reality has eliminated any protections for small producers or businesses so that local farmers in the Global South are made to compete with giant agribusiness corporations. In this scenario, it’s clear who will win. Thus, the global financial and trade system serves to entrench and expand US corporate interests.
War is a double investment
To summarize, capitalism necessarily leads to imperialism and a key aspect of imperialism is the financialization and export of capital and political and military protection and expansion of capital markets.
We have one piece of the puzzle left to put in place.
War is big business. This is no surprise. The enormous US budget expenditure on the military ensures that there is a perpetual supply of money—and investment opportunities—in the military-industrial complex. In 2024 the top ten US contractors were in the defense industry. Horrifically, international global conflicts provide huge profits for weapons manufacturers. The more savage the better. In calls with investors and statements after the October 2023 attacks by Hamas which began the ongoing Israeli genocide of Palestine, executives of weapons manufacturers made clear their enthusiasm for the increased opportunity for profits afforded by increased demand for weapons and government contracts. Weapons manufacturers further increase their profits by price-gouging the government.
With the increase in sophisticated software and hardware needed for cutting-edge weaponry and modern warfare, tech companies are securing more government contracts than ever before, with all of the Big Five tech companies (Alphabet (Google), Amazon, Apple, Microsoft, and Meta) dedicating significant research and investment to military applications. In particular, there is huge potential for profit for AI applications and big data projects. As a result, tech companies have blitzed the government for military contracts in recent years. The advent of widespread government surveillance has increased the opportunities for profits for companies willing to provide applications for government use, with Peter Thiel-founded company Palantir serving as a particularly dystopian example.
And where the business blitz is, venture capitalists are soon to follow. These funds allocate capital to promising startups to get them on their feet, hoping for a quick return on investment. Venture capitalists have increasingly funded tech startups, steering them towards development of military applications and coaching them in how to obtain military contracts. With the increased funding available from venture capitalists, and the stability of funding and need for tech applications by the US military, more and more existing companies and startups are focusing on developing military applications, leading to a self-perpetuating system of demand for, and profits from, continual war.
But war doesn’t just put profits in the pockets of military contractors. It causes massive systemic and economic shocks. As discussed above and analyzed in detail in Klein’s book, corporations take advantage of the chaos and destruction of war to swoop in and capture markets and assets, buying them up cheap and using the wartime powers of the state to seize and consolidate control over the public assets and financial institutions of nominally sovereign nations. In this way, war leads to profits for many other types of companies, from construction to oil and energy. Anything that is necessary to rebuild a shattered nation can be harnessed for corporate profits. The demand for these infrastructure services increases the value of investments in these companies.
As with the military startups, financial companies circle the carcasses of ruined nations. Banks provide loans for development, with strings attached. Venture capitalists are also ever willing to invest funds in development of war-ravaged areas, particularly if the US can maintain a military presence to stabilize potentially-volatile forces. This leads to sovereign nations becoming little more than client states to US capital, as was the case after the war in Iraq. Huge asset managers like BlackRock, who controls more money in assets ($10 trillion) than all global economies except the US and China, invest corporate money in thousands of companies, including weapons manufacturers and infrastructure and tech companies, recouping profits whenever the value of these companies increases. Thus, finance capital has a vested interest in the investment opportunities and short-term profits afforded and produced by military conflict.
The new horrific capitalist normal
All of these material forces mean that we are left with a grotesque reality where the demands of capital for profit push production and investment more and more towards military application, and the requirement for capitalist expansion means that more markets must be found both for the use of these military applications and in the aftermath of the destruction. What results is a state of perpetual war. The financialization of capitalism has produced a state of imperialism which cannot be limited to individual nations. The empire, though historically based in the US, is no longer housed there. It is housed in the global organization of finance capital and it continues its voracious demand for more resources, markets, and bodies. The US war machine supplies all in abundance.
The human toll of perpetual war continues to grow. If we are to end the perpetual wars before they end us, we must break the back of capital by striking at the systemic foundations of capitalism itself. As evidenced by the enthusiasm for the Fighting Oligarchy rallies, the time is ripening for political revolution. It’s up to us to harness and channel this protest into a solidarity capable of a truly revolutionary movement.
The neoliberal era with it’s neoclassical economics has created this fantasy world where money is created without regard to for energy, real resources or productive capacity. Financiers are treated like Gods and speculation in “efficient” markets is the name of the game. At the heart of this has been US $ hegemony which has allowed it to dominate markets, print money for its war machine without fear.
However monetary systems rely on trust and Trump is destroying that. The fear of course is that just like the GFC we all waste the opportunity and don’t reform monetary systems. In that regard BRICs may just be more of the same, just with different power brokers.
When it's more profitable to kill and destroy than to nurture and create, there's a big problem with the economic system we live under.
"War is big business. This is no surprise. The enormous US budget expenditure on the military ensures that there is a perpetual supply of money—and investment opportunities—in the military-industrial complex. In 2024 the top ten US contractors were in the defense industry. Horrifically, international global conflicts provide huge profits for weapons manufacturers. The more savage the better. In calls with investors and statements after the October 2023 attacks by Hamas which began the ongoing Israeli genocide of Palestine, executives of weapons manufacturers made clear their enthusiasm for the increased opportunity for profits afforded by increased demand for weapons and government contracts. Weapons manufacturers further increase their profits by price-gouging the government."