In colonizing undeveloped countries, business and government will engage in geopolitical conflict over the exploitation of labour of most of the population of the world.
As a result, workers in advanced capitalist countries will be kept in check by the fear of unemployment and will be content with the social welfare provided by the profits made through imperialist actions.
The colonial policy of these powers aimed to monopolize control over sources of raw materials and labor in specific territories.
In this chapter, Lenin criticizes Kautsky's conception of imperialism, which separates the political dimension from the fundamental economic basis.
Lenin attacks Kautsky's "ultra-imperialism", which claims that international cartels would lessen the unevenness and contradictions inherent in world capitalism.
Lenin argues that finance capital and trusts actually increase the unevenness in the rate of growth between different parts of the world economy, which leads to wars between imperialist powers.
Lenin explains that imperialism leads to increasing parasitism in advanced imperialist nations, where a section of the population lives off the dividends drawn from massive investments abroad.
He notes that the propertied classes support imperialism and that even bourgeois critics only call for reforming its most violent aspects, rather than opposing it.
[7][8] Lenin's socio-political analysis of empire as the ultimate stage of capitalism derived from Imperialism: A Study (1902) by John A. Hobson, an English economist, and Finance Capital (Das Finanzcapital, 1910) by Rudolf Hilferding, an Austrian Marxist, whose syntheses Lenin applied to the geopolitical circumstances of the First World War, caused by imperial competition among the European empires.
Three years earlier, in 1914, Karl Kautsky proposed a theory of capitalist coalition, wherein the imperial powers would unite and subsume their nationalist and economic antagonisms to a system of ultra-imperialism, whereby they would jointly effect the colonialist exploitation of the underdeveloped world.
Lenin countered Kautsky by proposing that the balance of power in international relations among the European empires continually changed, thereby disallowing the political unity of ultra-imperialism, and that such political instability motivated competition and conflict, rather than co-operation: Half a century ago, Germany was a miserable, insignificant country, if her capitalist strength is compared with that of the Britain of that time; Japan compared with Russia in the same way.
[14] In 1916, Lenin wrote Imperialism, the Highest Stage of the Capitalism, in Zürich, during the January–June period; he sent it to Parus, a Petrograd-based publishing house set up by the writer Maxim Gorky, a five times nominee for the Nobel Prize in Literature and Lenin's friend; it would become a part of a series of popular surveys of West European countries involved in the war edited by the Marxist historian Mikhail Pokrovsky, but Gorky put it out in addition to the regular series.