28/6/1914 Archduke Franz Ferdinand assassinated in Sarajevo
By a Serb who was part of a group seeking to create a federation of south Slav nations called Yugoslavia, free from the control of the Austro-Hungarian empire
Austria-Hungary declared war against Serbia
Tsarist Russia came out in support of Serbia, as fellow Slavs
Germany took the side of Austria-Hungary
France supported Russia as they had invested large sums in the country
Britain was an ally of France
The German SDP, the British Labour party & the French Socialist party, all supported their own ruling class
The Second International was effectively dead
Richer countries exploit poorer weaker ones in the form of finance capital.
In the early 20th century, the economies of Britain & France were relatively stagnant as they were losing markets to new rising capitalist countries, particularly the United States, Germany & Japan.
But the new imperialist countries with their rapidly expanding industry & trade had relatively few colonies.
All African countries, with the exception of Ethiopia, were colonies of the European powers in 1914, mostly Britain & France, but a few were colonies of Germany, while Liberia was a semi-colony of the United States.
Japan colonized Taiwan in 1895 & Korea in 1910.
The growing disproportion between the industrial power of the contending imperialist countries & the actual division of the world into colonies, semi-colonies and spheres of influence had to be adjusted.
And it was, through war.
The imperialist powers are able to use super-profits, defined as profits above & beyond the average rate of profit, to bribe in various ways sections of the working class in the imperialist countries.
This enables the capitalists of the imperialist countries to share a portion of these super-profits with sections of the working class.
This is the material basis for the opportunism of the so-called socialist parties that sold out their workers.
USA Replaces Great Britain
After WWI London was no longer the main financial centre, New York was.
The Federal Reserve Bank replaced the Bank of England as the most powerful central bank.
Led by the House of Morgan, the U.S. financed the war effort of the “allies”(Britain, Russia & France) against the “central powers” (Germany, Austria-Hungary &the Ottoman Empire).
1923 German Hyperinflation