The Poverty of Philosophy, Engels Preface To The First German Edition (1885) - Part 7 of 14

As 2008 showed, it even means the state nationalising the failed companies, be they banks or industrial capital, to protect the interests of shareholders, bondholders, and other forms of fictitious-capital.

“But the transformation, either into joint-stock companies, or into state ownership, does not do away with the capitalistic nature of the productive forces. In the joint-stock companies this is obvious. And the modern state, again, is only the organisation that bourgeois society takes on in order to support the general external conditions of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists.

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 fact, as the period after 2008 has shown, this contradiction has become extremely acute. On the one hand, the state, as representative of the ruling class, is forced to defend the interests of the dominant form of property. But, that dominant form of property, large-scale socialised capital is itself transitional, and, thereby, represents the most acute form of contradiction possible within capitalist society. The interests of the dominant form of property is for an extension of planning and regulation on an extended scale, and for the development of conditions conducive to capital accumulation. Objectively, the collective owners of that dominant form of property, and so ruling class, are the associated producers, i.e. the working class, and salaried, professional middle-class managers, also drawn from the workers, but, in practice, control continues to reside with the owners of fictitious capital, and specifically shareholders!

In practice, therefore, the owners of that fictitious-capital continue to hold the position of ruling class, long after their social function has not only disappeared, but after they have become an active impediment on the further development of capital itself, much as was the case with the old landed aristocracy, long after the bourgeoisie and bourgeois property became dominant. The social-democratic state, itself, therefore, also becomes the locus of this contradiction.

On the one hand, it must seek to defend the interests of large-scale, socialised capital, by, facilitating capital accumulation, on the other, it must act as the state of the existing ruling class, whose property consists not of industrial capital, but of fictitious-capital, and whose interests reside, not in the accumulation of real capital, but of maximising revenues from interest, and from capital gains from inflating asset prices, which requires a constriction of capital accumulation and growth, to keep interest rates low, and ensure a flow of revenue into speculative assets.

Engels' comment, then, does not refer to some catastrophic economic collapse, but to this growing social/political collapse arising from these contradictions, heralding the political revolution, required to bring the political/juridical superstructure into alignment with the underlying social and productive relations. It means that the mass of society, the associated producers, eventually see this contradiction between the interests of the owners of fictitious-capital, and their state, which acts directly against the interests of the mass of society, by holding back economic growth, purely to facilitate the maintenance of the wealth of this tiny minority of coupon clippers, who even according to bourgeois property laws, exercise exclusive control over property they do not own, and, on the basis of it, also acquire possession of the lion's share of production.

Engels also presents that same formulation, here.

“But what in economic terms may be formally incorrect, may all the same be correct from the point of view of world history. If mass moral consciousness declares an economic fact to be unjust, as it did at one time in the case of slavery and statute labour, that is proof that the fact itself has outlived its day, that other economic facts have made their appearance due to which the former has become unbearable and untenable.” (p 13)

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