In fact, as Marx and Engels describe, for example in Anti-Duhring, the contradictions had already reached another breaking point. The main form of socialised capital, i.e. the joint stock company/corporation, the collective property of the workers, or associated producers, as Marx calls them, is not controlled by those workers, but by shareholders, i.e. not by the owners of that capital, but by the owners of fictitious-capital, whose interests are immediately antagonistic to it. For much of the 20th century, this contradiction was contained. The owners of fictitious-capital, sought to maximise their revenues from the money-capital they loaned. Ultimately, that required that profits be used to accumulate capital, not to endlessly increase the proportion of those profits paid out as interest/dividends.
If the socialised capital was controlled by its collective owners, the associated producers, that would happen, as profits were retained and invested in additional capital. The lenders of money-capital (owners of fictitious capital) would increasingly become redundant, as a parasitic excrescence, and competition between them to lend money, would force interest rates down. However, the socialised capital was not controlled by its owners, but by shareholders, and, consequently, the Boards of Directors they appointed served their interests, not those of the company. As interest rates fell, the shareholders compensated by simply having those Directors allocate a growing proportion of profits to be paid as dividends, rather than retained for investment. As Haldane has noted, in the 1970's, only 10%, on average, of profits went to pay dividends, whereas, today, it is around 70%. (There has been a similar rise in the proportion of building costs accounted for by land prices from 10%, after WWII, to around 70%, today).
The consequence was that share prices rose inexorably, and as share prices rose, so too all other asset prices rose. The owners of fictitious-capital were no longer primarily concerned with revenue/interest/rent, but with perennial capital gains, resulting from these ever inflating asset prices. But, without expanding capital, there are limits to the expansion of profits, and without expanding profits there is no sustainable basis for an expansion of dividends/interest, rent or taxes. Consequently, there is no basis for a continued rise in asset prices, and when they stop rising, they fall. A financial crash happens, as with 1987, 2000, and 2008, and other smaller crashes in between. Only inflation, i.e. a devaluation of the standard of prices can create the illusion of continued rising asset prices, which is what QE did.
But, the ruling class is a global class of owners of this fictitious-capital – which is why, in the end, its interests conflict with those of nation states, currently trying to reverse the process of globalisation, represented by Brexit, Biden's Inflation Reduction Act, and so on, which represent the agenda of the reactionary, nationalist petty-bourgeoisie. The capitalist state remains the state of the ruling-class, but the immediate interests of this ruling-class, not to see their wealth decimated, as asset prices crash, conflicts with the interests of the real industrial capital (objectively the collective property of workers), upon which that wealth is actually based! The social-democratic state, now, becomes the arena in which this struggle between two antagonistic forms of capitalist property (real socialised industrial capital and fictitious capital) is played out.
Ultimately, the state must represent the long-term, as against the short-term, interests of the ruling class, and that involves it representing the interests of the real industrial capital, and its need to accumulate (objectively, that also means the interests of the collective owners of that capital, i.e. the working-class, indicating, as Marx sets out in Capital III, Chapter 27, the transitional nature of this form of property). That need, in the age of imperialism, of monopoly capitalism, involves its requirement for planning and regulation, and standardisation, on an ever wider basis. Logically, the creation of a single global market and state, but which the limitations of imperialism, and continuance of nation states, frustrates. Gravity pulls matter together in the universe, but it takes the form of separated clumps of matter, in the process.
Hence the development of the EU, and other such structures, as well as attempts to create global para state bodies such as WTO, World Bank, IMF and so on, and hence, also, the dynamic driving imperialism in Israel, and the Middle East, as well as in Ukraine, Taiwan and elsewhere. These kinds of development, of creating larger single markets, and of which the process of globalisation was an inherent component, are compatible with the needs of both real industrial capital, and fictitious-capital. They reduce costs, and frictions, thereby, facilitating increased realised profits, and rates of profit, without additional capital accumulation, without profits being used for that purpose rather than being handed to shareholders. But, they are limited, and not only have those limits been temporarily reached, but, also, other factors have put them into reverse. The most obvious manifestation is Brexit.
It is the interests of the petty-bourgeoisie, politically ascendant since the 1980's, manifest in its take over of conservative parties, and movement to the Right of the Overton Window, that conflicts with that process of globalisation. It is manifest in the fact that, not only has that petty-bourgeoisie, whose strength resides in its numbers, taken over conservative parties, but as a result of its electoral weight, has also shifted the nature of the existing workers' parties, such as Labour, Democrats, SPD etc. Those parties, which were, formerly, characterised as bourgeois workers' parties, i.e. parties based upon the working-class, but dominated by bourgeois ideas, have, become petty-bourgeois workers parties, most noticeable in the collapse of Starmer's Blue Labour into jingoism, and Brexitism, as it seeks to accommodate the interests of the reactionary petty-bourgeoisie, in search of its votes.
Real industrial capital requires not only a resumption of that process of creating larger single markets, but, also, requires that profits be used for capital accumulation, not ever rising amounts of dividends, share buybacks, rents, taxes and so on. The operation of the long-wave cycle has itself imposed that necessity on it, even though the ruling class has utilised the state to try to subvert it, and mitigate it, so as to avoid crashes in asset prices. As with the period of the early 1960's, we have entered a phase of the long wave cycle in which the productivity gains, resulting from the microchip revolution of the 1970's/80's, have now dissipated. Employment has risen, and started to use up the relative surplus population created in the 1980's/90's. It means that wages also begin to rise, a process that was only slowed as a result of the austerity measures introduced after 2010, alongside the continued attempts to inflate asset prices, and divert money from the real economy, into such speculation, by utilising QE.
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