Primarily known today for its influence on Lenin’s theory of imperialism, Rudolf Hilferding’s Finance Capital is an important, but flawed, work of Marxist economics that has much to offer contemporary readers, especially as the global recession continues. Taking for granted the analysis of capitalist production in the first volume of Marx’s Capital, Hilferding develops Marx’s claims from the second and third volumes of Capital about commodity exchange and credit. Hilferding begins by analyzing the functions of money and credit, moves on to examine the creation of corporations and cartels, and then critically reflects on the causes of imperialism and the revolutionary opportunities created by the concentrated power of finance capital. The book starts with a long, and rather dry, discussion of money. “A society based upon private property and the division of labour [i.e., a capitalist society] is only possible by virtue of . . . exchange relationship among its members; it becomes a society through exchange, which is the only social process it recognizes from an economic standpoint.” Since commodities do not directly express each other’s value, a general equivalent – money – is needed to facilitate exchange. Money, “as a form of value, is always a temporary transition stage to the value of a commodity.” In other words, in the exchange sequence C-M-C, money is a passing stage, not the final destination. Paper money, when legitimated by the power of the state, can fulfill as well as gold this function of a “medium of circulation.” However, gold is not just money but also a commodity itself, and embodies value even outside of the exchange process. Gold is therefore important for international trade and for stabilizing the valuation of paper currencies (Hilferding here anticipates the issues that would appear when nations went off the gold standard). “[M]oney with an intrinsic value – such as gold – is always needed as a means of storing wealth in a form in which it is always available for use.” In commodity exchange, payment is often not immediately settled between buyer and seller. When the debt that arises in such situations is finally paid, money takes on a new function: “it becomes a means of payment.” “The contraction of a debt and its repayment are separated by a period of time. This means that the money which is turned over in payment can no longer be regarded as a mere link in the chain of commodity exchange or as a transitory economic form for which something else may be substituted. On the contrary, when money is used as a means of payment it is an essential part of the process.” Promissory notes that have not been redeemed can be circulated themselves, and function as “credit money” that eventually must be converted back into real money. Banks assist in the canceling and settling of such debts, and grow alongside the use of commercial credit. However, “Once money is used as a means of payment a complete mutual cancellation of payments at any given time must be seen as a sheer accident, which will never occur in reality. Money concludes independently the process of moving commodities from place to place. . . . The link in the sequence C-M-C is broken.” Yet credit can also take a quite different form and function. In contrast to such commercial credit (which primarily facilitates exchange on the market), capital or investment credit is invested in production and used to produce surplus value. When offered as capital credit, money becomes capital. As Marx shows in the first volume of Capital, “Value becomes capital when it is used to produce surplus value,” and surplus value is produced only in capitalist production. The capitalist uses money to purchase labor power and commodities. However, the commodities purchased by the capitalist are used to produce more commodities, which, because of the addition of labor power, have a higher value and can be exchanged for a greater value of money than was originally invested in production. In this situation, the original money is capital not because of any inherent qualities (as usual, money is just exchanged for commodities), but because it is used to eventually produce surplus value. Importantly, the capitalist need not own the money capital originally invested, but rather can have it lent to him. Capital credit is available because industrial capitalist production produces idle money for a number of reasons. Because fixed capital (like factories or machines) has to periodically be replaced, money has to be hoarded in preparation for that moment, and remains idle in the meantime. Also, beginning or expanding capitalist production typically requires a large minimum sum of money capital, which, before it is completely accumulated, also may lie idle. For these and other reasons, “there arises from the very mechanism of capital circulation the necessity for a larger or smaller amount of money capital to remain idle for longer or shorter periods.” But idle money produces no profit, and therefore is an affront to capitalism itself. Offered as credit, however, this idle money is able to produce profit. “Investment credit . . . transfers money and converts it from idle into active money capital.” “Once [money capital] is released from the cycle of any one individual capital, it can function as money in the cycle of another capital if it is made available to other capitalists in the form of credit. . . . All the factors, therefore, which have led to the idleness of capital now become so many causes for the emergence of credit relations, and all the factors which affect the quantity of idle capital also determine the expansion and contraction of credit.” Although the productive capitalist may directly loan idle money to other capitalists, this position of loan capitalist has been almost completely taken over by the banks. The banks serve the “economic function which consists of collecting idle money capital and then distributing it.” As the banks grow in size and scope as lenders of capital credit, banks and the industries they invest in become more closely tied together. Enterprises become more dependent on credit to be competitive, and banks, attempting to guarantee the return on their investments, become more concerned with “the long-range prospects of the enterprises and the future state of the market.” This close coupling of banks and industries creates strong pressures to form joint-stock companies or corporations. Banks obtain “promoter’s profit” by assisting in the creation of new corporations or the transformation of individually-owned enterprises into corporations. Through access to credit, corporations are less financially constrained and therefore able to be more competitive in general than individually-owned enterprises. They can grow to an enormous size and approximate some economic-technological ideal, rather than be limited by contingent factors such as their accumulated capital. Corporations also undermine the traditional form of private property. Corporate shares are fictitious capital because the original capital, which has been invested in machinery or paying workers, cannot be immediately reclaimed. “Once the shareholder has parted with this capital, he cannot recover it. He has no claim upon it, but only a claim to a pro-rata share of its yield.” Unlike with individually-owned enterprises, control of a corporation does not require complete ownership, only a controlling share. Less capital therefore gives more control. Corporations exploit this feature by purchasing shares in each other that allow them to place individuals on the boards of directors and influence each other’s decisions. Banks also attempt to acquire a permanent role in the corporations they invest in by placing individuals on the directorships of corporate boards. Shares double the capital invested in production, and therefore can circulate on the stock market independently of that capital. “Once a share has been issued it has nothing more to do with the real cycle of the industrial capital which it represents. None of the developments or misfortunes which it may encounter in its circulation have any direct effect on the cycle of the productive capital.” Reflecting this autonomy of fictitious capital from industrial capital, speculation on the stock market affects the distribution of profit, not its creation. Money made speculating on the market is only a “marginal gain” - what one person gains another person loses – because surplus value is only created through production. Therefore, “Speculation cannot flourish without the participation of the public,” which must take a loss for the elite to profit. Speculation, which is basically a form of gambling, is not essential to capitalist production, but it does facilitate the “mobilization of capital,” especially in an industrial era when capital invested in production often is tied up for long periods of time as fixed capital. However, speculation, whether on the stock exchange or futures markets, depends on uncertainty and risks that disappear with the concentration of control through cartelization. The interlocking directorships of corporations allow for the elimination of competition and the coordination of businesses. Cartels and trusts emerge as a result: “A consortium comprising as many enterprises as possible, which is intended to raise prices, and hence profits, by excluding competition as completely as possible, is a cartel.” The concentration of capital in banks and the expansion of cartels creates a spiraling effect: “From the outset the effect of advanced cartelization is that the banks also amalgamate and expand in order not to become dependent upon the cartel or trust. In this way cartelization itself requires the amalgamation of the banks, and, conversely, amalgamation of the banks requires cartelization. . . . As a result of cartelization . . . the relations between the banks and industry become still closer, and at the same time the banks acquire an increasing control over the capital invested in industry.” The capital held by the banks at this point becomes finance capital. “The dependence of industry on the banks is therefore a consequence of property relationships. An ever-increasing part of the capital of industry does not belong to the industrialists who use it. They are able to dispose over capital only through the banks, which represent the owners. On the other side, the banks have to invest an ever-increasing part of their capital in industry, and in this way they become to a greater and greater extent industrial capitalists. I call bank capital, that is capital in money form which is actually transformed in this way into industrial capital, finance capital.” “Finance capital develops with the development of the joint-stock company and reaches its peak with the monopolization of industry. . . . As capital itself at the highest stage of its development becomes finance capital, so the magnate of capital, the finance capitalist, increasingly concentrates his control over the whole national capital by means of his dominance of bank capital.” Usurers’ and merchants’ capital was historically important for the initial establishment and success of industrial production. As industrial production developed, it became more independent of usurers’ capital and placed more of its idle capital in banks as bank capital. In the final stage, however, that bank capital, as finance capital, is used to dominate industry. “The Hegelians spoke of the negation of the negation: bank capital was the negation of usurer’s capital and is itself negated by finance capital.” Describing the impressive power of finance capital, Hilferding echoes Foucault’s description of biopower: “[T]he specific character of capital is obliterated in finance capital. Capital now appears as a unitary power which exercises sovereign sway over the life process of society.” However, the apparent success of finance capital in solving the “problem of the organization of the social economy” does not prevent crises from continuing to occur. Hilferding bases his theory of crises on Marx’s schema of reproduction, arguing that a lack of proportion between the capital goods and consumer goods industries disrupts simple and expanded reproduction and leads to crises (Ernest Mandel rejects this argument, claiming that Marx’s schema are meant merely to show that capitalist accumulation is hypothetically possible, not to demonstrate how such accumulation breaks down). A “distortion of the price structure” prevents production from being properly regulated. Credit can play a role in this “disruption of the specific regulatory mechanisms of production,” particularly by pumping money capital into industries even though their rate of profit is declining. Despite their power, cartels are still subject to the law of value, and their control of prices and profit rates, while initially benefiting them, may make the underlying economic problems worse: “Cartels do not diminish, but exacerbate, the disturbances in the regulation of prices which lead ultimately to disproportionalities, and so to the contradiction between the conditions of utilization and the conditions of valorization.” That is, “Cartels . . . do not eliminate the effects of crises. They modify them only to the extent that they can divert the main burden of a crisis to the non-cartelized industries.” Because cartelization alone cannot prevent or solve crises, finance capital turns to foreign markets as a solution. “We know . . . that the opening of new markets is an important factor in bringing an industrial depression to an end, in prolonging a period of prosperity, and in moderating the effects of crises.” Cartels use their power to make the state create protective tariffs or export subsidies that give them an advantage over foreign companies. Such tariffs secure their home market, but make penetration of foreign markets more difficult. Exporting capital is one solution to this obstacle. “By ‘export of capital’ I mean the export of value which is intended to breed surplus value abroad. It is essential from this point of view that the surplus value should remain at the disposal of the domestic capital.” By exporting capital, finance capitalists are able to exploit differences between countries’ rates of profit, levels of organic composition of capital, availability of cheap labor, and ground rent. As a result of the export of capital, foreign markets also become capable of consuming more, helping the balance of trade (greater overseas production generates more income for consumption of the capital-exporting country’s goods). But in order for the exported capital to be secure and fulfill its function, a specific political system is imposed on foreign countries, typically through direct imperial control. “Export capital feels most comfortable . . . when its own state is in complete control of the new territory, for capital exports from other countries are then excluded, it enjoys a privileged position, and its profits are more or less guaranteed by the state. Thus the export of capital also encourages an imperialist policy.” Annexing foreign markets, however, leads to hostility between developed countries and an increased risk of war. Resistance to the policies of finance capital and imperialism is complicated by the class composition created by large corporations. The large new salaried middle class, though not owning the means of production, continues to identify with the capitalist class as long as export-led growth continues. “The rapid development of the large banks, the expansion of production brought about by the export of capital, the conquest of new markets, all serve to open up new fields of employment for salaried employees of all kinds. Still divorced from the struggle of the proletariat, they see their best prospects in the expansion of capital’s sphere of activity.” The working class is in a different situation. Labor unions are reformist because they don’t struggle against the capitalist relation itself. But as they become more universal under monopoly capital, they might provide the foundation for a labor party that could work toward more political and radical goals. “Once an independent political party of the workers exists its policy is not confined for long to those issues which led to its creation, but becomes a policy which seeks to represent the class interests of workers as whole, thus moving beyond the struggle within bourgeois society into a struggle against bourgeois society.” Although finance capital’s policies will lead to war between imperialist nations as they fight over spheres of influence, the proletariat shouldn’t just enthusiastically wait for that catastrophe. The collapse of capitalism will “be political and social, not economic; for the idea of a purely economic collapse makes no sense.” It is therefore important to maintain “a steadfast, relentless struggle against the policy of imperialism.” But resistance to finance capital should not take the form a nostalgic desire to return to an older form of capitalism, such as the free trade of the 19th century, but rather must consist of the fight for socialism. Fortunately, because finance capital has already “brought the most important branches of production under its control, it is enough for society, through its conscious executive organ – the state conquered by the working class – to seize finance capital in order to gain immediate control of these branches of production.” Hilferding concludes with a rather Leninist image of the revolution: “The capitalist class seizes possession of the state apparatus in a direct, undisguised and palpable way, and makes it the instrument of its exploitative interests in a manner which is apparent to every worker, who must now recognize that the conquest of political power by the proletariat is his own most immediate personal interest. The blatant seizure of the state by the capitalist class directly compels every proletarian to strive for the conquest of political power as the only means of putting an end to his own exploitation. . . . In the violent clash of these hostile interest the dictatorship of the magnates of capital will finally be transformed into the dictatorship of the proletariat.”
Monday, November 15, 2010
Rudolf Hilferding: Finance Capital (1910)
Primarily known today for its influence on Lenin’s theory of imperialism, Rudolf Hilferding’s Finance Capital is an important, but flawed, work of Marxist economics that has much to offer contemporary readers, especially as the global recession continues. Taking for granted the analysis of capitalist production in the first volume of Marx’s Capital, Hilferding develops Marx’s claims from the second and third volumes of Capital about commodity exchange and credit. Hilferding begins by analyzing the functions of money and credit, moves on to examine the creation of corporations and cartels, and then critically reflects on the causes of imperialism and the revolutionary opportunities created by the concentrated power of finance capital. The book starts with a long, and rather dry, discussion of money. “A society based upon private property and the division of labour [i.e., a capitalist society] is only possible by virtue of . . . exchange relationship among its members; it becomes a society through exchange, which is the only social process it recognizes from an economic standpoint.” Since commodities do not directly express each other’s value, a general equivalent – money – is needed to facilitate exchange. Money, “as a form of value, is always a temporary transition stage to the value of a commodity.” In other words, in the exchange sequence C-M-C, money is a passing stage, not the final destination. Paper money, when legitimated by the power of the state, can fulfill as well as gold this function of a “medium of circulation.” However, gold is not just money but also a commodity itself, and embodies value even outside of the exchange process. Gold is therefore important for international trade and for stabilizing the valuation of paper currencies (Hilferding here anticipates the issues that would appear when nations went off the gold standard). “[M]oney with an intrinsic value – such as gold – is always needed as a means of storing wealth in a form in which it is always available for use.” In commodity exchange, payment is often not immediately settled between buyer and seller. When the debt that arises in such situations is finally paid, money takes on a new function: “it becomes a means of payment.” “The contraction of a debt and its repayment are separated by a period of time. This means that the money which is turned over in payment can no longer be regarded as a mere link in the chain of commodity exchange or as a transitory economic form for which something else may be substituted. On the contrary, when money is used as a means of payment it is an essential part of the process.” Promissory notes that have not been redeemed can be circulated themselves, and function as “credit money” that eventually must be converted back into real money. Banks assist in the canceling and settling of such debts, and grow alongside the use of commercial credit. However, “Once money is used as a means of payment a complete mutual cancellation of payments at any given time must be seen as a sheer accident, which will never occur in reality. Money concludes independently the process of moving commodities from place to place. . . . The link in the sequence C-M-C is broken.” Yet credit can also take a quite different form and function. In contrast to such commercial credit (which primarily facilitates exchange on the market), capital or investment credit is invested in production and used to produce surplus value. When offered as capital credit, money becomes capital. As Marx shows in the first volume of Capital, “Value becomes capital when it is used to produce surplus value,” and surplus value is produced only in capitalist production. The capitalist uses money to purchase labor power and commodities. However, the commodities purchased by the capitalist are used to produce more commodities, which, because of the addition of labor power, have a higher value and can be exchanged for a greater value of money than was originally invested in production. In this situation, the original money is capital not because of any inherent qualities (as usual, money is just exchanged for commodities), but because it is used to eventually produce surplus value. Importantly, the capitalist need not own the money capital originally invested, but rather can have it lent to him. Capital credit is available because industrial capitalist production produces idle money for a number of reasons. Because fixed capital (like factories or machines) has to periodically be replaced, money has to be hoarded in preparation for that moment, and remains idle in the meantime. Also, beginning or expanding capitalist production typically requires a large minimum sum of money capital, which, before it is completely accumulated, also may lie idle. For these and other reasons, “there arises from the very mechanism of capital circulation the necessity for a larger or smaller amount of money capital to remain idle for longer or shorter periods.” But idle money produces no profit, and therefore is an affront to capitalism itself. Offered as credit, however, this idle money is able to produce profit. “Investment credit . . . transfers money and converts it from idle into active money capital.” “Once [money capital] is released from the cycle of any one individual capital, it can function as money in the cycle of another capital if it is made available to other capitalists in the form of credit. . . . All the factors, therefore, which have led to the idleness of capital now become so many causes for the emergence of credit relations, and all the factors which affect the quantity of idle capital also determine the expansion and contraction of credit.” Although the productive capitalist may directly loan idle money to other capitalists, this position of loan capitalist has been almost completely taken over by the banks. The banks serve the “economic function which consists of collecting idle money capital and then distributing it.” As the banks grow in size and scope as lenders of capital credit, banks and the industries they invest in become more closely tied together. Enterprises become more dependent on credit to be competitive, and banks, attempting to guarantee the return on their investments, become more concerned with “the long-range prospects of the enterprises and the future state of the market.” This close coupling of banks and industries creates strong pressures to form joint-stock companies or corporations. Banks obtain “promoter’s profit” by assisting in the creation of new corporations or the transformation of individually-owned enterprises into corporations. Through access to credit, corporations are less financially constrained and therefore able to be more competitive in general than individually-owned enterprises. They can grow to an enormous size and approximate some economic-technological ideal, rather than be limited by contingent factors such as their accumulated capital. Corporations also undermine the traditional form of private property. Corporate shares are fictitious capital because the original capital, which has been invested in machinery or paying workers, cannot be immediately reclaimed. “Once the shareholder has parted with this capital, he cannot recover it. He has no claim upon it, but only a claim to a pro-rata share of its yield.” Unlike with individually-owned enterprises, control of a corporation does not require complete ownership, only a controlling share. Less capital therefore gives more control. Corporations exploit this feature by purchasing shares in each other that allow them to place individuals on the boards of directors and influence each other’s decisions. Banks also attempt to acquire a permanent role in the corporations they invest in by placing individuals on the directorships of corporate boards. Shares double the capital invested in production, and therefore can circulate on the stock market independently of that capital. “Once a share has been issued it has nothing more to do with the real cycle of the industrial capital which it represents. None of the developments or misfortunes which it may encounter in its circulation have any direct effect on the cycle of the productive capital.” Reflecting this autonomy of fictitious capital from industrial capital, speculation on the stock market affects the distribution of profit, not its creation. Money made speculating on the market is only a “marginal gain” - what one person gains another person loses – because surplus value is only created through production. Therefore, “Speculation cannot flourish without the participation of the public,” which must take a loss for the elite to profit. Speculation, which is basically a form of gambling, is not essential to capitalist production, but it does facilitate the “mobilization of capital,” especially in an industrial era when capital invested in production often is tied up for long periods of time as fixed capital. However, speculation, whether on the stock exchange or futures markets, depends on uncertainty and risks that disappear with the concentration of control through cartelization. The interlocking directorships of corporations allow for the elimination of competition and the coordination of businesses. Cartels and trusts emerge as a result: “A consortium comprising as many enterprises as possible, which is intended to raise prices, and hence profits, by excluding competition as completely as possible, is a cartel.” The concentration of capital in banks and the expansion of cartels creates a spiraling effect: “From the outset the effect of advanced cartelization is that the banks also amalgamate and expand in order not to become dependent upon the cartel or trust. In this way cartelization itself requires the amalgamation of the banks, and, conversely, amalgamation of the banks requires cartelization. . . . As a result of cartelization . . . the relations between the banks and industry become still closer, and at the same time the banks acquire an increasing control over the capital invested in industry.” The capital held by the banks at this point becomes finance capital. “The dependence of industry on the banks is therefore a consequence of property relationships. An ever-increasing part of the capital of industry does not belong to the industrialists who use it. They are able to dispose over capital only through the banks, which represent the owners. On the other side, the banks have to invest an ever-increasing part of their capital in industry, and in this way they become to a greater and greater extent industrial capitalists. I call bank capital, that is capital in money form which is actually transformed in this way into industrial capital, finance capital.” “Finance capital develops with the development of the joint-stock company and reaches its peak with the monopolization of industry. . . . As capital itself at the highest stage of its development becomes finance capital, so the magnate of capital, the finance capitalist, increasingly concentrates his control over the whole national capital by means of his dominance of bank capital.” Usurers’ and merchants’ capital was historically important for the initial establishment and success of industrial production. As industrial production developed, it became more independent of usurers’ capital and placed more of its idle capital in banks as bank capital. In the final stage, however, that bank capital, as finance capital, is used to dominate industry. “The Hegelians spoke of the negation of the negation: bank capital was the negation of usurer’s capital and is itself negated by finance capital.” Describing the impressive power of finance capital, Hilferding echoes Foucault’s description of biopower: “[T]he specific character of capital is obliterated in finance capital. Capital now appears as a unitary power which exercises sovereign sway over the life process of society.” However, the apparent success of finance capital in solving the “problem of the organization of the social economy” does not prevent crises from continuing to occur. Hilferding bases his theory of crises on Marx’s schema of reproduction, arguing that a lack of proportion between the capital goods and consumer goods industries disrupts simple and expanded reproduction and leads to crises (Ernest Mandel rejects this argument, claiming that Marx’s schema are meant merely to show that capitalist accumulation is hypothetically possible, not to demonstrate how such accumulation breaks down). A “distortion of the price structure” prevents production from being properly regulated. Credit can play a role in this “disruption of the specific regulatory mechanisms of production,” particularly by pumping money capital into industries even though their rate of profit is declining. Despite their power, cartels are still subject to the law of value, and their control of prices and profit rates, while initially benefiting them, may make the underlying economic problems worse: “Cartels do not diminish, but exacerbate, the disturbances in the regulation of prices which lead ultimately to disproportionalities, and so to the contradiction between the conditions of utilization and the conditions of valorization.” That is, “Cartels . . . do not eliminate the effects of crises. They modify them only to the extent that they can divert the main burden of a crisis to the non-cartelized industries.” Because cartelization alone cannot prevent or solve crises, finance capital turns to foreign markets as a solution. “We know . . . that the opening of new markets is an important factor in bringing an industrial depression to an end, in prolonging a period of prosperity, and in moderating the effects of crises.” Cartels use their power to make the state create protective tariffs or export subsidies that give them an advantage over foreign companies. Such tariffs secure their home market, but make penetration of foreign markets more difficult. Exporting capital is one solution to this obstacle. “By ‘export of capital’ I mean the export of value which is intended to breed surplus value abroad. It is essential from this point of view that the surplus value should remain at the disposal of the domestic capital.” By exporting capital, finance capitalists are able to exploit differences between countries’ rates of profit, levels of organic composition of capital, availability of cheap labor, and ground rent. As a result of the export of capital, foreign markets also become capable of consuming more, helping the balance of trade (greater overseas production generates more income for consumption of the capital-exporting country’s goods). But in order for the exported capital to be secure and fulfill its function, a specific political system is imposed on foreign countries, typically through direct imperial control. “Export capital feels most comfortable . . . when its own state is in complete control of the new territory, for capital exports from other countries are then excluded, it enjoys a privileged position, and its profits are more or less guaranteed by the state. Thus the export of capital also encourages an imperialist policy.” Annexing foreign markets, however, leads to hostility between developed countries and an increased risk of war. Resistance to the policies of finance capital and imperialism is complicated by the class composition created by large corporations. The large new salaried middle class, though not owning the means of production, continues to identify with the capitalist class as long as export-led growth continues. “The rapid development of the large banks, the expansion of production brought about by the export of capital, the conquest of new markets, all serve to open up new fields of employment for salaried employees of all kinds. Still divorced from the struggle of the proletariat, they see their best prospects in the expansion of capital’s sphere of activity.” The working class is in a different situation. Labor unions are reformist because they don’t struggle against the capitalist relation itself. But as they become more universal under monopoly capital, they might provide the foundation for a labor party that could work toward more political and radical goals. “Once an independent political party of the workers exists its policy is not confined for long to those issues which led to its creation, but becomes a policy which seeks to represent the class interests of workers as whole, thus moving beyond the struggle within bourgeois society into a struggle against bourgeois society.” Although finance capital’s policies will lead to war between imperialist nations as they fight over spheres of influence, the proletariat shouldn’t just enthusiastically wait for that catastrophe. The collapse of capitalism will “be political and social, not economic; for the idea of a purely economic collapse makes no sense.” It is therefore important to maintain “a steadfast, relentless struggle against the policy of imperialism.” But resistance to finance capital should not take the form a nostalgic desire to return to an older form of capitalism, such as the free trade of the 19th century, but rather must consist of the fight for socialism. Fortunately, because finance capital has already “brought the most important branches of production under its control, it is enough for society, through its conscious executive organ – the state conquered by the working class – to seize finance capital in order to gain immediate control of these branches of production.” Hilferding concludes with a rather Leninist image of the revolution: “The capitalist class seizes possession of the state apparatus in a direct, undisguised and palpable way, and makes it the instrument of its exploitative interests in a manner which is apparent to every worker, who must now recognize that the conquest of political power by the proletariat is his own most immediate personal interest. The blatant seizure of the state by the capitalist class directly compels every proletarian to strive for the conquest of political power as the only means of putting an end to his own exploitation. . . . In the violent clash of these hostile interest the dictatorship of the magnates of capital will finally be transformed into the dictatorship of the proletariat.”
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