Tuesday, 31 December 2019

Theories of Surplus Value, Part III, Addenda - Part 21

The existence of loanable money-capital in the hands of money-lending capitalists, and the need of industrial capitalists to borrow it, is what brings about interest, and the competition between the two groups is what determines the rate of interest. The monopoly of landed property, and the need to use the land by industrial capital, and the ability, thereby, of landed property to appropriate surplus profits is what enables them to secure rent

“The abolition of landed property in the Ricardian sense, that is, its conversion into State property so that rent is paid to the State instead of to the landlord, is the ideal, the heart’s desire, which springs from the deepest, inmost essence of capital. Capital cannot abolish landed property. But by converting it into rent [which is paid to the State] the capitalists as a class appropriate it and use it to defray their State expenses, thus appropriating in a roundabout way what cannot be retained directly. Abolition of interest and of interest-bearing capital, on the other hand, means the abolition of capital and of capitalist production itself. As long as money (commodities) can serve as capital, it can be sold as capital. It is therefore quite in keeping with the views of the petty-bourgeois Utopians that they want to keep commodities but not money, industrial capital but not interest-bearing capital, profit but not interest.” (p 472) 

Ricardians, in the 19th century, proposed nationalising land for this reason. They argued that if the state received the rent, rather than landlords, it would not then have to raise so much in taxes, which are also a deduction from profits. The bourgeoisie never implemented the idea as they married into the landed aristocracy, became large landowners themselves, and as they feared an appropriation by the state of one form of private property might give ideas to the working-class about the appropriation of all private property. 

As private capital became socialised capital, at the end of the 19th century, the division between industrial capital and interest-bearing capital became more acute. The private capitalists withdrew from their social function in production, which was then taken over by functioning capitalists, day to day professional managers, administrators, technicians etc. The capitalists became merely money-lending capitalists, the owners of fictitious capital, in the shape of shares and bonds, and their derivatives. But, it was by these means and their control of the political regime that they were able to continue to exercise control, as company law gave shareholders, not the company itself (i.e. the managers and workers) the right to appoint company boards etc. 

But, as Marx and Engels point out, in Anti-Duhring, even if socialised capital were to assume its most mature form, as state-capital, it would still be capital. It would process commodities, it would employ wage labour, labour-power sold as a commodity. It would simply be the capitalist par excellence

“The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is rather brought to a head. But, brought to a head, it topples over. State ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.” 

(Anti-Duhring, p 360) 

“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. 

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.” 

(Anti-Duhring p 358) 

The state would borrow money-capital from money-lending capitalists, by issuing bonds, and these money lenders would then be seen as a purely parasitic class obtaining large revenues whilst performing no useful function. Engels though that workers would not tolerate such a situation for long, but experience from the last century, when such large-scale nationalised industry was established, including at the start of the 21st century, when in 2008, the banks were nationalised, calls that into doubt. In fact, its not only the social democrats that have promoted the ideas of such state capitalism, but also many who call themselves Marxists. 

“There are not two different kinds of capital—interest-bearing and profit-yielding—but the self same capital which operates in the process of production as capital, produces a profit which is divided between two different capitalists—one standing outside the process, and, as owner, representing capital as such [but it is an essential condition of this capital that it is represented by a private owner; without this it does not become capital as opposed to wage-labour], and the other representing operating capital, capital which takes part in the production process.” (p 473) 

And, this is what has been seen. Real capital, industrial capital has become socialised capital. The anarchy of early 19th century free market competition has been replaced by planning and regulation at the enterprise, and state level as “capitalist society capitulates before the planned production of the invading socialist society”. But, interest-bearing capital, the money-capital loaned to companies and the state, in exchange for shares and bonds (fictitious capital), has become the main form of private wealth for the dominant section of the ruling class. 

Ultimately, it is only the productive-capital which is capable of self-expansion, and which makes possible the payment of rent, interest and taxes. That is why, ultimately, these other revenues, and their recipients are subordinated to the productive-capital. 

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