Bourgeois-Democracy Crumbles As It Defends Its Genocide - Part 8 of 19

There are a series of contradictions faced by bourgeois-democracy, each of which is inter-related, and many of which arise as a result of the solutions utilised for previous contradictions, themselves creating new contradictions. This is very like the situation described by Marx in The Poverty of Philosophy, that resulted from Proudhon's method, and that is not surprising, because the method of social-democracy, is pretty much that same method.

The fundamental contradiction is that socialised capital, as a transitional form of property, is objectively the collective property of workers, but is controlled, not by workers but the ruling-class of money-lending capitalists (coupon clippers) whose wealth now exists in the form of fictitious-capital, not this real industrial capital. As Marx sets out in Capital III, the interests of these two forms of capital are immediately antagonistic. The money-lending capitalists (shareholders, bondholders etc.) seek to maximise their total return from interest/dividends and capital gain, but that is antagonistic to the interests of real industrial capital that seeks to minimise the amount paid as interest, or other forms of capital transfer, in order to maximise profit of enterprise, so as to maximise capital accumulation.

The collective owners of socialised capital (the workers) do not control it, and the state, as the state of the ruling class of coupon clippers/speculators, ensures they can never control it, short of a pre-revolutionary situation, of dual power, in which the workers, organised in soviets/workers' councils, impose workers control, arms in hand. Yet, that use of force (albeit legal or legislative force) that prevents workers exercising that control, and vests it with the shareholders, does not change the underlying contradiction of the antagonistic interests of these two forms of capital. Even where social-democracy reached its zenith, in the 1970's, with the introduction of co-determination, most noticeably in Germany, it was again just a repeat of the sham of bourgeois-democracy, transplanted into industrial democracy. The elected worker directors are always in a minority, and so simply give cover for a continuation of the domination of the shareholders.

So boards of Directors continued to denude retained profits for capital accumulation, and instead used those profits to finance excessive dividends and interest payments, capital transfers to shareholders, the buy back of shares to raise share prices, as well as exorbitant remittances to those Directors, including the use of share options and so on that further tie them in to shareholder interests as against the company interest. This condition was hidden in the 1990's, because the technological revolution of the 1980's, so raised productivity, and brought about a moral depreciation of fixed capital, rise in the annual rate of profit, and release of capital, that even as profit was drained into these unproductive revenues, the mass of realised profit grew to such an extent, and the mass of physical output grew so much that the aforementioned condition arose that 25% of all human production is accounted for in just the first ten years of the current century.

But, as the proportion of profits going to rent and interest payments, particularly, (but also taxes) grew, at the expense of retained profits, so asset prices rose. The growing mass of interest/dividends did not go back into financing additional capital accumulation – which simply retaining profits would have done more effectively – but went instead into a demand for existing shares, bonds and property, pushing up those asset prices, as monetary demand for them grew faster than a, now, constrained supply of them. That fuelled further speculation, on the basis of the now familiar fear of missing out (FOMO). Moreover, not only was it the recipients of these revenues that ploughed money into such speculation, but a proportion of wages also went into it, and, in the case of property, increasing amounts of money was simply borrowed for that purpose.

The solutions, and consequences of this fundamental contradiction, were as follows.

1. Asset prices inflated to astronomical levels acting as a drag on the real economy, and capital accumulation, contrary to the claims about so called “wealth effects”.
   
   
2. The ruling-class of coupon-clippers/speculators, became more concerned with the capital gain element of total returns than with the revenue element, whether in the form of interest/dividends or rents.
   
   
3. When asset price bubbles burst, as in 1987, 2000 and 2008, the state, as protector of the immediate interest of this ruling class, acted to reflate those asset prices, both by devaluing the standard of prices, and by damaging the real economy to slow the demand for capital, in order to reduce rates of interest.
   
   
4. One solution to the need to expand the mass of profit, so as to facilitate the continued increase in interest/dividends and rents, without a proportional increase in capital accumulation, was to shift production to other lower cost countries in Asia, notably China, and this process got underway in the 1980's, creating a new contradiction, now being seen, as China, is rising as an imperialist power in its own right, combining with Russia and BRICS+ to challenge the old imperialist hegemon.
   
   
5. This process of “deindustrialisation” begun in the 1980's, and shift of production to China etc., led to a weakening of large-scale socialised capital, in the developed economies. At the same time, it created conditions for a rapid growth of the petty-bourgeoisie, reversing the trend of the previous 150 years. Most of this petty-bourgeoisie was itself deprived and precarious, taking the form of the self-employed, white van man, or small business sweating other labour, including family labour. It was concentrated in the old decaying urban areas, decimated by deindustrialisation, the so called “Red Wall” constituencies. Its petty-bourgeois nature brought with it all of the reactionary ideology of that petty-bourgeois layer.
   
   
6. Its strength resides, like the peasantry, in its numbers, significant only in electoral terms, not in its socio-economic strength. It does not control large masses of property or the state, as the bourgeoisie does, and nor does it have the industrial economic power that the working-class possesses. But, it does have the large numbers (around 15 million in Britain) to vote. That voting power, enabled it to seize control of the Tories, and, thereby, to push through Brexit, against the interests of both the ruling class, and the interests of large-scale socialised capital, and, thereby, of its collective owners, the working-class.
   
   
7. That cut off another solution for bourgeois-democracy that of reducing costs and raising the rate of turnover of capital, by abolishing national borders and creating larger single markets, such as the EU.
   
   
8. As globalisation stalls, the world returns to the conditions prior to WWI, in which powerful nation states sought to advance their own interests at the expense of others, by dominating the economies around them. But, now, it is large, continental sized politico-economic blocs engaged in such conflict, which drives towards WWIII. That is the context of the proxy wars in Ukraine, Israel/Palestine, Africa, and increasingly the South China Sea/Pacific.

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