But, as I have described elsewhere, there is another aspect of this. That is that the ruling-class has used its control over the political regime to ensure that it continues to exert control over property it does not own – socialised industrial capital. Socialised industrial capital is the collective property of the workers, but they are excluded, by company law, from exercising control over their property, other than in the case of the worker cooperative. They are even denied control over their own pension funds! Shareholders are only creditors of such companies, the same as bondholders or a bank that lends money to it etc. Yet, the shareholders are able to vote at the AGM, appoint Directors to act on their behalf, and so on, i.e. to exercise control over property they do not own, including, thereby, to control how much of the profits are paid to them as dividends, used to buy back shares, rather than invest in capital accumulation and so on.
As Marx notes, in Capital III, this indicates the antagonistic relationship between this fictitious-capital, and the real industrial capital, between the division of profit into interest/dividends, and into profit of enterprise. There is no objective basis for shareholders being given control, and as Kay and Silberston point out, other creditors – bondholders, banks, landlords, equipment lessors – have no such right. It stems purely from the control of the political regime by the ruling-class, and its ability, thereby, to determine company law, much as the landlord class continued to legislate in their class interests throughout the 19th century.
If the associated producers – workers and managers – exercised their rightful control over their collective property, the amount paid in dividends, and consequently in other interest payments, capital transfers, as well as in inflated salaries and other payments to executives, would be reduced massively. By far the greatest source of additional money-capital for investment comes from realised money profits. Workers exercising control would use those profits for capital accumulation, largely removing the need to borrow money from share and bondholders. Of itself, that would reduce the amounts paid in dividends and interest. The consequence would be a fall in share and bond prices, and consequently, other asset prices, such as land.
In the period following the early 1980's, the microchip revolution massively raised productivity, and with it relative surplus value. As with all such stagnation phases of the long-wave cycle, the surplus product,/surplus value/net product rose relative to the gross product/output value. The rise in productivity also cheapened fixed capital, via a huge moral depreciation, raising the rate of profit, and creating a huge release of capital. Interest rates fell, causing asset prices to rise, also causing yields on those assets to fall. Given that the ruling class is, now, a class of speculators and coupon-clippers, that owns only these assets, it saw, on the one hand, a huge rise in its paper wealth, as asset bubbles inflated, but a fall in its revenues, as yields on those assets fell (not only dividend yields, and bond yields, but also rents).
It, once again, sought to counter this inevitable consequence of the operation of the economic system it created, and rests upon, by political means. Firstly, it used its control of capital to simply increase dividends, and other capital transfers. Haldane notes that, in the 1970's, dividends accounted for only 10% of profits, but by the 2000's, they accounted for 70% of profits. Of itself, this shows the extent to which the ruling-class and its ownership of fictitious-capital acts in a way that is antagonistic to and detrimental to the rational development of capital itself.
By draining profits into dividends, interest payments, and other capital transfers, capital accumulation was, itself, held back, which, in turn, constrained the further expansion of capital, and, thereby, of profits, undermining the capitalist system itself. On the one hand, it facilitated a rise of industrial capital in China, and other newly industrialising economies, whilst, in the developed economies, it facilitated a resurgence of the petty-bourgeoisie, which stepped into the void created. Since the 1980's, the petty-bourgeoisie, in Britain, has grown by 50%, reversing the trend of the previous 200 years, and providing the material basis for a resurgence of petty-bourgeois, nationalist politics, as presented by Brexit.
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