If socialised capital was actually under the control of its owners, the associated producers within each company, they clearly would not have used the excess money-capital in the way shareholders have done. They may, indeed, have used some profits to buy back shares, but only to reduce the future debt burden of the company, and not to simply further inflate share prices, and flatter earnings per share figures, as current executives have done, partly, also, in their own interests, so as to maximise their gains from share options. They would have used those profits to accumulate additional capital, particularly in those spheres where new technologies have made possible the development of whole new ranges of use values, in medical sciences, and so on, for example. And, they would have used some to pay higher wages, and to reduce the working week, retirement age and so on, as well as increasing the education and training of workers. They certainly would not have been subjecting themselves to zero-hours contracts and other forms of precarious employment.
Nor would they wait until a crisis of overproduction of capital arose, before engaging in technological innovation and investment. Capital only engages in such large-scale innovation, a a result of crises, so as to replace labour, create a relative surplus population, and reduce wages, so as to boost profits. As Connolly described in relation to the Ralahine Cooperative, however, and as Marx theorises, workers introduce fixed capital early so as to lighten their workload. They introduce equipment as soon as its cost is less than the labour it saves, whereas capital only does so when its cost is less than the wages it saves.
The money handed to share and bondholders as dividends/interest payments or just straightforward cash payments, even allowing for the conspicuous consumption of the ruling class owners of that fictitious capital, was simply hurled back into the casino, as demand for the limited number of existing shares and bonds, whose supply not only grew more slowly, but even, in respect of shares, contracted, as the number of IPO's declined significantly, whilst companies used profits to buy back shares and cancel shares. Consequently, share and other asset prices surged, as described earlier.
That illustrates the parasitic nature of the ruling class, as owners of fictitious-capital, and the way they act as a fetter even on the further development of capital itself. As interest rates fell, and asset prices rose, causing yields on land, property, shares and bonds to fall, so that ruling class, became reduced to simply a bunch of speculators, gambling on which asset prices would rise and which fall the most, in order to obtain capital gains from the process. And, whenever that process led to asset prices as a whole falling, their state was there to step in to provide additional liquidity to boost those prices once more, to undermine real capital and the economy, so as to again reduce interest rates and boost asset prices.
The description of “The Great Moderation” provided by Martin also doesn't fit reality. He says,
“The propensity to save had increased through rising social inequality (richer people save more than poor people), and through more people saving directly or through pension funds for longer retirements. Governments of the leading capitalist countries were able to sell bonds (IOUs carrying interest payments) at low interest rates because of a high propensity of those savers (and of the Chinese and other states, building up their foreign reserves) to seek safer long-term assets rather than go for buying shares which may boom but then may also slump.”
But, it wasn't the case that all of this saving went into the safe option of government bonds, during all of this period, rather than into equities. The DOW could not have risen by 1300% between 1980 and 2000, without huge amounts of additional demand for shares.
The NASDAQ could not have risen from less than 1,000 at the start of 1990, to over 8,000 by the start of 2000, without huge amounts of buying of shares.
And, of course, it didn't stop there. Although the NASDAQ crashed, and took a long time to recover, the DOW and S&P rose spectacularly again between 2000, and the 2008 financial crash. The DOW went from 10,000 in 2000 to 14,000 in 2007, whilst the S&P 500 went from 1500 in 2002 to over 2000 in 2007. And, after 2009, the rise in these stock markets resumed again, as economic growth slowed, and austerity slowed it even further. These further rises in asset prices have clearly not been the consequence of further sharply rising rates of profit, but have been simply a consequence of central bank policies of injecting ever more liquidity, specifically to produce asset price inflation.
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