A Crisis Carol - Stave 4 - The Ghost of Crisis Future - Part 5

The perverse nature of the world the scrooges had created, therefore, was indicated by the fact that the more the real economy grew, real capital was accumulated, and more real wealth was generated, the more all of the fictitious wealth was destroyed. The more governments began again to see that the wealth of nations is built, not on the inflation of these asset prices, but on the accumulation of real capital. Politically, it was the ideas that represented the interests of this real capital that then began to take preference once more, as they had done during the period after WWII, and up to the 1980's.

Ideas about the problems caused by “Quarterly Capitalism”, and the need for a reform of corporate governance began to be expressed even more widely. In Britain, even Theresa May's Tory government raised the need for reform of corporate governance, including putting workers on company boards. The fact that such industrial democracy had existed in Germany, for decades, without the system collapsing, gave even greater confidence to apply such measures more extensively.

The ghost provided a voice over to the images that flashed before the scrooges eyes.

Factory Inspector Leonard Horner

“You capitalists have always been terrible at looking after your own long-term interests. You have plundered the natural resources of the planet that you required, and you nearly destroyed the workers you required to produce profits and so on. Its only when your state intervenes to provide some regulation of your self-destructive activities that you are saved from yourselves.”

In Anti-Duhring, Engels makes this point. As Marx describes in Capital, the very process of capital accumulation leads to capital as private property becoming a fetter on its own further development, and the end of capital as private property. The fetter of the monopoly of capitalist private property is burst asunder with the development of socialised capital in the form of the joint stock company and co-operative, and the corporation, trust etc.

“Many of these means of production and of communication are, from the outset, so colossal that, like the railways, they exclude all other forms of capitalistic exploitation. At a certain stage of development this form, too, no longer suffices: [the large-scale producers in one and the same branch of industry in a country unite in a “trust”, an association for the purpose of regulating production.” 

(Engels, Anti-Duhring, p 358)

“All the social functions of the capitalist are now performed by salaried employees. The capitalist no longer has any social activity save the pocketing of revenues, the clipping of coupons, and gambling on the Stock Exchange, where the different capitalists fleece each other of their capital. Just as at first the capitalist mode of production displaced the workers, so now it is displacing the capitalists, relegating them, just as it did the workers, to the superfluous population, although not immediately to the industrial reserve army.”

(ibid, p 359-60)

By focusing on their desire to suck out revenue as interest, the scrooges, via their representatives on company boards, had acted to undermine the very thing that provided those revenues, in the longer term. When they became fixated on the illusion of fictitious wealth, even over the appropriation of revenue, they acted to actually destroy wealth.  As Marx again puts it,

"The credit system, which has its focus in the so-called national banks and the big money-lenders and usurers surrounding them, constitutes enormous centralisation, and gives to this class of parasites the fabulous power, not only to periodically despoil industrial capitalists, but also to interfere in actual production in a most dangerous manner — and this gang knows nothing about production and has nothing to do with it. The Acts of 1844 and 1845 are proof of the growing power of these bandits, who are augmented by financiers and stock-jobbers."

(Capital III, Chapter 33)

Had they stepped aside, and allowed the interests of the socialised capital itself to prevail, the extent of their fictitious wealth would have been much smaller (share prices, bond prices, property prices) but their revenues would have been much greater.

“In the trusts, free competition changes into monopoly and the planless production of capitalist society capitulates before the planned production of the invading socialist society. Of course, this is initially still to the benefit of the capitalists.”

(ibid, p 358)

An economy that grows strongly, and accumulates capital, so as to produce larger masses of profit, can thereby also provide larger revenues as taxes, interest and rent. Just as the landowners made way for the capitalist farmer, and thereby settled for capitalist rent from their land, and the private capitalist gave way to the professional salaried manager, so the money-lending capitalist needed to step away from their attempts to control the socialised capital, via their boardroom representatives, and settle for the receipt of interest.

But, they have tried to hold on, as had done the landlords, and private capitalists. And, having seen what happened to their predecessors, they clung on with good reason.

“But, the exploitation becomes so palpable here that it must break down. No nation would put up with production directed by trusts, with such a barefaced exploitation of the community by a small band of coupon clippers.”

(ibid, p 358)

As the vision once more faded to black, the scrooges stood in front of the ghost. The goose flew off into the night sky. A shiny golden egg was being fondled by the ghost.

“So, what are we to take from that,” asked the scrooges? “We seem screwed either way.”

“Well,” said the ghost, “you could always try a more radical solution than all those you have tried so far.”

The scrooges faces brightened.

“What is that,” they enquired anxiously.

“You could always get a job, and earn your living like everyone else!”

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