[…] By the early 20th century, the development of world capitalism had become highly contradictory. On the one hand, there was globalisation: rapid economic growth, the dominance of giant firms, a restless search for new markets, ever-expanding international trade. On the other, there was economic nationalism, as industrial cartels, banking syndicates, and military states fused into opposing national-capitalist blocs.
It was Germany, as the most dynamic of these blocs, that experienced the contradiction in its most acute form.
As the mass of German capital seeking markets continued to expand, it pushed beyond the limits of the existing national territory. But it then ran into barriers: protective tariffs, closed colonial markets, competition from foreign capitalists.
Here was the deepest root of the First World War. Finance capitalism – the growth of giant monopolies and the fusing of industrial, bank, and state capital – had created a dangerous world of competing nationalisms.
‘When competition has finally reached its highest stage,’ explained [Nikolai] Bukharin, ‘when it has become competition between state capitalist trusts, then the use of state power, and the possibilities connected with it, begin to play a very large part … The more strained the situation in the world sphere of struggle – and our epoch is characterised by the greatest intensity of competition between ‘national’ groups of finance capital – the oftener an appeal is made to the mailed fist of state power.’