Furthermore, all of these huge socialised capitals could no longer operate on the basis of the old free market competition, of early commodity production, and private capitalist production. Each was forced to base production on the use of long-term planning and that increasingly required ever larger single markets, ever larger states, and ever increasing involvement of the state in planning and regulating the economy itself, i.e. social democracy as a transitional form corresponding to socialised capital as a transitional form of property. As Marx and Engels put it, in Anti-Duhring, all of this planning and regulation remains to the benefit of the capitalists.
“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)
Unfortunately, they have done so for much longer than either Marx or Engels might have expected, as well as allowing non-owners of capital to exercise that control, and to exclude workers from it. Workers and day to day professional managers (functioning capitalists) – as distinct from the high level executives appointed by shareholders to represent their separate interests as money-lending capitalists – are the collective owners of this socialised capital, but, other than in the worker cooperative, they do not have control over it.
“All the social functions of the capitalist are now performed by salaried employees. The capitalist has no further social function than that of pocketing dividends, tearing off coupons, and gambling on the Stock Exchange, where the different capitalists despoil one another of their capital. At first the capitalist mode of production forces out the workers. Now it forces out the capitalists, and reduces them, just as it reduced the workers, to the ranks of the surplus population, although not immediately into those of the industrial reserve army.”
(Engels, Anti-Duhring, p 359-60)
As Marx and Engels describe, in Capital III, the interests of these shareholders and other coupon clippers, as owners of fictitious-capital, or interest-bearing capital, are inimical to, and antagonistic to the interests of real industrial capital. On the one hand, they seek to maximise the payment of interest to them, either as coupon or dividends, which, is antagonistic to the interests of industrial capital to maximise profit of enterprise, available for capital accumulation. That is why they use their appointed executives to increase the proportion of profits used for dividends rather than capital accumulation.
Competition between capitals, however, means that, in periods of more rapid economic activity, firms must invest to grab their share of the market, or lose out, and go into decline. Oligopolies can also form trusts, to regulate that, but as Marx points out, in The Poverty of Philosophy, that simply forces competition to arise from other sources. It means smaller capitals can fill the void, and, globally, developing economies fulfil a similar role. Over the last 40 years, when firms have increased dividends as a share of profits from 10% to around 70%, making further increases difficult, it takes, on the other hand, the form of a search for capital gain, arising from increases in asset prices, which requires interest rates to be held down, by restraining growth, and requires, the state to use QE to buy up worthless paper assets to inflate their price.
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