Colonialism was the tendency to seize new lands, annex them in order to yoke them completely to the metropolitan country in both political and legal sense. So to say, this concept was used in the sense of appropriation of political rights, politic annexation, and elimination of political independence of the country which is under domination. But the world empire of finance capital, in fact means economic annexation; establishment of hegemony over weaker countries, and, on this basis, creation of spheres of influence under imperialist powers’ control. Land annexation and colonialist expansion continued to survive in the beginning of finance capital epoch which we call imperialism. In the First World War which broke out in this period, powerful capitalist states forced toiling masses to slaughter one another for not only creating spheres of influence in imperialist style, but also for the sake of seizing colonies of their rivals and obtaining new ones. Both sides of this reality take their place in Lenin’s explanations on that period. Besides the tendency of subjugating weak countries through imperialist methods, colonialist annexations did also take place and this aggression of major capitalist powers characterized initial period of 20th century. But as years passed, old colonies gained their political independence one after another because of both the increasing pressure of national liberation wars and the dominant nature of finance capital which is indispensably superior to colonial monopoly on this or that country. Thus, although former glorious colonialist empires on which “the sun never set” disappeared, imperialism neither disappeared nor changed its nature.

Thus, it is not correct to equate imperialism with colonialist expansion and therefore suggest new concepts in order to describe the world after the Second World War when the colonialist empires collapsed. The reality that some try to describe with the concept “neo-colonialism” indeed has nothing new, but it is just the imperialist-capitalist system that financially subordinated underdeveloped and medium-developed capitalist countries to itself.

Lenin made it clear that it was the question of imperialism that had to be primarily dealt with and analysed during the preparatory discussions of the new party programme in October 1917. He drew attention to important points in his draft programme. He criticized Sokolnikov’s draft which defined imperialism as division of world on the basis of land. “The struggle for colonies (for "new lands"), and the struggle for "the possession of territories of weaker countries", all existed before imperialism” says Lenin and continues:

The distinguishing feature of imperialism is something quite different, something which did not exist before the twentieth century—the economic partitioning of the world among international trusts, the partitioning of countries, by agreement, into market areas. This particular point has not been expressed in Comrade Sokolnikov's draft, the power of imperialism is, therefore, represented as much weaker than it really is.[1]

What is essential in the imperialist epoch is the economic power of major capitalist states that enables them to subordinate even politically independent countries. Giant monopolies and financial groups, which are the distinguishing features of that epoch, compete with each other in order to penetrate this or that country’s market’ and share the cake according to their power. Imperialist competition is not for division of the world with respect to land as it was during the colonialist era, but for a division of spheres of influence in which finance capital will easily operate.

Debt mechanism has an important role in the operation of imperialist domination. Therefore, “unlike British colonial imperialism, French imperialism might be termed usury imperialism”[2] said Lenin. Since, the important part of French foreign capital investments was composed of state loans to European countries and especially to Russia. This is not a detail, but a striking fact characterizing imperialist period. And just for that reason, on French experience, Lenin pointed out that capitalism which had begun with small usury ended up in the biggest usury. Germany’s position in comparison with colonialist England was sufficiently exposing the essentials of imperialist epoch: “If Germany’s trade with the British colonies is developing more rapidly than Great Britain’s, it only proves that German imperialism is younger, stronger and better organised than British imperialism, is superior to it”.[3] Lenin drew attention to the fact that Germany’s colonies were less in number, and capital flowing out from Germany to foreign countries was equally balanced between Europe and America. In the imperialist epoch, strength was not to be sought in colonial invasion but in the capacity of finance capital to penetrate other regions.

This reality came out to light by the end of the First World War and began to mark the new era. A young country, the USA, where capitalism developed with lightning speed, was a new power which arose not on the basis of colonialist rivalry but directly on a new basis, that is, expansionism of finance capital on a world scale. While European countries were fighting one another for the colonies, USA embraced these European countries with the power of finance capital, began to rise among others, and thus came to the front as the hegemonic power of the imperialist world.

Although this process was not so clear at the beginning of 20th century, we can see that Lenin noted fundamental facts characterizing the new period. In the final analysis, it is the strength of capital that will determine the division of the world among imperialist states. This fact was emphasized by Lenin through a quotation from a leading news paper of American multimillionaires: “The war in Europe is being waged for world domination. To dominate the world two things are needed: dollars and banks. We have the dollars, we shall make the banks and we shall dominate the world.”[4]

Capitalism, having risen to the stage of imperialism, tries to overcome the contradiction between internationalization of the productive forces and nation-state form by expansionism of finance capital. In Bukharin’s words, “finance capital is the most penetrating form of capital in need of filling every void.” Finance capital continues to exploit the world in a more extensive and intensive way unless the imperialist-capitalist system is overthrown. Thus, even the most remote corners of the world are drawn in to imperialist-capitalist system and economic relations are deepened among imperialist states.