Meanwhile, the development of that large scale socialised capital, which eclipsed the monopoly of private capital that preceded it, had also brought another transformation with it, which was that the former owners of that private capital had been transformed into a class of rentiers, coupon clippers, whose wealth was held in the form of fictitious capital, of shares and bonds. As Marx describes in Capital III, and Theories of Surplus Value, the objective interests of this class now diverge from the objective interests of industrial capital.
Their immediate interests depend not upon the accumulation of real capital, but on the appropriation of interest/dividends out of the profits produced by industrial capital. In order to ensure that, they made sure to use their political power to pass corporate governance legislation, when limited liability companies were made possible, that gave shareholders control over those companies, and their capital, even though they were mere creditors of those companies. The old alliance between the landed aristocracy, and the financial oligarchy that was represented by the Tory Party, and which is increasingly manifest in the merging and intermarriage of these exploiting classes, emerges in a new form. These conservative parties, which can be seen across the world, become the representative of that ruling class, whose actual objective interest is now at odds with the interests of the dominant form of property, large-scale socialised capital, whose accumulation is the determinant of the fortunes of the state itself. In other words, this represents a transitional state, in which the contradictions have been sharpened and raised to a new height.
The heightened contradiction is manifest in the fact that, the short-term interest of this fictitious-capital, the property form of the ruling-class, is contradictory to the interests of the real socialised capital, and, thereby, the long-term interest of the state itself. But, the long-term interest of the fictitious-capital, and of the ruling class is itself dependent upon the development of the real socialised capital, which is the source of profits, and thereby of the interest/dividends and rent that provides the revenues, and underpins the capital gains on the fictitious capital. The long-term interest of fictitious capital, is only possible on the basis of the continued development of large-scale socialised capital, and so the interests of the ruling class are only furthered, by the continued advance of the socialised property, and development of the new ruling class – the working-class and middle class collective owners of that socialised capital. The ruling class's short-term interest contradicts its own long-term interest!
Social-democracy, thereby, reflects this contradiction. The social-democratic parties represent a popular front in which the owners of these two contradictory forms of capitalist property are combined. On the one hand, they contain the conservative social-democrats who represent the interests of large-scale fictitious-capital, and, thereby, its owners, the top 0.01% of the population that owns and controls the majority of fictitious-capital. On the other hand, they contain the progressive social-democrats who represent the interests of the large-scale socialised capital itself, and, thereby, the professional middle class that is its personification. And, they contain the reformist socialist representatives of the working-class, whose own interests are tied to the development of this large-scale socialised capital, so long as they are not able to go beyond it to their own direct control over the means of production.
The conservative parties, as opposed to the conservative wings of the social-democratic parties, then become not conservative at all, but reactionary. That is best seen with the Tory Party in Britain, and the Republicans in the US. Their membership becomes dominated by the most numerous components of the bourgeoisie, which increasingly becomes indistinguishable from the petty-bourgeoisie. In other words, it is dominated by the plethora of small private capitalists which linger on as a relic of capitalism's earlier development, prior to the development of socialised capital, and also of all those new small private capitals that are constantly being brought into existence, and as constantly going out of existence, unable to compete with large scale socialised capital.
As parties seeking governmental office, these conservative parties, however, are forced to recognise the reality that the fortunes of the state itself depends upon the fortunes of large-scale socialised capital. The conservative parties themselves, therefore, are racked by their own internal contradiction. In their ideology and programmes they must reflect the interests of their own core membership and voter base amongst the petty-bourgeoisie, in opposition to large scale socialised capital, whilst, in government, they have to act in the interests of that large-scale socialised capital, because on it depends the future of the state.
In the end, the social-democratic elements of these conservative parties, together with the conservative wings of the social-democratic parties are led to the same position of seeking to protect the interests of the owners of fictitious-capital, but, in the longer-term that can only be done by advancing the interests of large-scale socialised capital itself. That requires that greater regulation and planning occurs, to ensure that capital accumulation can take place in a more secure environment; it requires that larger single markets be developed, as the minimum size of operations of these larger capitals and so on. But, what the owners of that fictitious-capital cannot allow is that this occurs, on any meaningful basis, outside their own continued control of the real socialised capital.
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