The last Innovation Cycle, which brought the microchip revolution, peaked in 1985. It acted to raise productivity, create a relative surplus population, release capital, and massively raise the rate of profit over the next 20 years. As Marx describes in Theories of Surplus Value, such periods are marked by net output rising faster than gross output. But, eventually, as all of the old fixed capital has been replaced by the new machines/technology, that basis of raising productivity dissipates. In the period of intensive accumulation, one new machine replaces two or three older machines, as these older machines wear out. The new machine also requires only one operator, often less skilled, than the two or three operators of the old machines, who are now also replaced. But, now, in the period of extensive accumulation, to increase output, requires not the replacement of existing machines/technology and workers, but the addition of more machines/technology and workers. Productivity growth slows, the relative surplus population stops growing, net output no longer grows faster than gross output. Both net output and gross output rise at a faster pace than in the earlier period, but, now, that is because gross output itself grows faster, capital accumulation expands at a faster pace.
As I have described before, this could be seen clearly, in the late 1990's, and into the early 2000's. The catastrophists, of course, could not accept the idea that capitalism/imperialism could ever be in a condition other than impending crisis, as they anticipated “the next recession”, induced by a continually falling rate of profit. I also, detailed why they were wrong, despite the global financial crisis of 2008, which actually disproved their theories. The 2008 global financial crisis, rather like that of 1847, was a consequence of rising interest rates causing asset prices to drop sharply, and the reason interest rates rise, in such a period, as Marx sets out in Capital III, is because the system has entered a period of more rapid growth, and capital accumulation. It is that, which explains the actions of the global ruling-class, since 2008. It also, explains the real basis of NATO's illegal war on Iran.
The global ruling-class, as owners of fictitious-capital, over the last 40 years, became addicted to speculative capital gains. Those capital gains were simply the other side of the coin to falling interest rates/yields. The revenue produced by the ownership of loanable money-capital is interest, just as the revenue produced by the ownership of land is rent, and the revenue produced by the ownership of industrial capital is profit. Dividends are just the name given to the interest paid on the money-capital loaned in the form of share purchase. As set out earlier, as interest rates fell in a secular downward trend after 1982, the ruling-class saw, on the one-hand, its paper wealth, in the form of financial and property assets, expand astronomically, as huge asset price bubbles were inflated. On the other hand, it saw the yields on those assets drop significantly, as the other side of those higher asset prices.
That did not require the actual revenue to fall, whether it was rent or interest/dividends. If you get £100 of interest/dividends on a bond/share that costs you £1,000 to buy that is a yield of 10%. But, the same £100, if the price of the bond/share rises to £2,000 is a yield of only 5%. The same thing with rent. If you own land/property that produces £10,000 of rent a year, it is a yield of 10% if the property cost £100,000 to buy, but only 5% if the price of the property rises to £200,000. Considering Marx's point referred to earlier, if a disproportionate amount of money goes into the ownership of loanable money-capital (i.e. into the purchase ownership of shares, bonds etc.) then this money-capital is devalued, and manifest in a corresponding rise in the price of those assets, and fall in yields/interest rates.
If you are part of the ruling-class, and your ownership of those financial and property assets runs into billions of Dollars, the fact that yields drop to insignificant levels does not matter. Even a yield of 1% on $100 billion is $1 billion of revenue per year. But, if you are a pensioner from the working or middle-class, a pension pot of $250,000 would, on the same basis, provide you only with an annual revenue of $2,500, and so inadequate to live on. But, the other side of those low yields, was the rise in asset prices. If you could cash in a part of the value of the asset, or borrow against it, that appeared to be as good as getting a yield from it, and, in the case of property, with less effort. It appeared there was no need, even to have the trouble of having tenants in properties, if year after year, the property rose in price by 10%, giving a notional £10,000 on a £100,000 property. Nor did it seem to matter if the money used to buy shares was used by companies to invest in real capital accumulation. Indeed, the latter itself became a hazard to those rising asset prices.
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