Anti-Duhring, Introduction, I – General - Part 5 of 17

In WWI, the old bourgeois ideas of bargaining within the system, of trades unionism, reformism and sectionalism, asserted themselves in the labour movement, however, in the phenomenal form of nationalism, as the workers of each country united, not with the workers of other countries, against capital, but with their own ruling classes, in the hope of securing a bigger share of the global pie, at the expense of their fellow workers in other countries.

Marx and Engels note the beginning of that process. In Capital III, Marx notes the division and antagonistic interests of interest-bearing capitalists (fictitious-capital, share and bond holders) with real industrial capital, and, thereby, the functioning capitalists, who develop into a sizeable, professional middle-class, but also with the workers who are, objectively, the collective owners of the socialised capital. As Marx sets out, interest-bearing capital does not stand in an antagonistic relation to workers as workers.

“The lending capitalist as such faces the capitalist performing his actual function in the process of reproduction, not the wage-worker, who, precisely under capitalist production, is expropriated of the means of production. Interest-bearing capital is capital as property as distinct from capital as a function. But so long as capital does not perform its function, it does not exploit labourers and does not come into opposition to labour.

On the other hand, profit of enterprise is not related as an opposite to wage-labour, but only to interest.” 

(Capital III, Ch.23)

Fictitious-capital (interest-bearing capital/shares/bonds, i.e., the property of the ruling class) stands in an antagonistic relation to workers, not as workers, but as the collective owners of socialised capital.

The interests of this socialised capital must determine the interests of the state, but also of the ruling-class, in the end, despite the short-term antagonistic interests. Without an expansion of the real industrial capital, there is no expansion of profits, and so, ultimately, no expansion of interest-dividends, rents or taxes. The consequence of trying to deny that reality simply exacerbates the contradiction.

“It would be still more absurd to presume that capital would yield interest on the basis of capitalist production without performing any productive function, i.e., without creating surplus-value, of which interest is just a part; that the capitalist mode of production would run its course without capitalist production. If an untowardly large section of capitalists were to convert their capital into money-capital, the result would be a frightful depreciation of money-capital and a frightful fall in the rate of interest; many would at once face the impossibility of living on their interest, and would hence be compelled to reconvert into industrial capitalists.”

(ibid)

The owners of fictitious-capital may use their control, as shareholders, in law, to continually increase the proportion of profit taken in interest/dividends, or capital transfers (asset stripping), as Haldane notes they have done since the 1970's, but the result is to continually reduce the proportion available as profit of enterprise, available for real capital accumulation. The result is inevitably to raise price-earnings ratios to ever higher levels, and to reduce yields on financial and property assets, leading to financial bubbles and financial crashes, as with 2008.

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