Wednesday, February 29, 2012

Relevant for Occupy Wall Street: Rudolf Hilferding on Finance Capital

Here. A solid thinker from the Austro-Marxist school, who opposed both the Social Democrats in Germany and the Third International. For "cartel" you could substitute "corporation".

"The cartel itself presupposes a large bank which is in a position to provide, on a regular basis, the vast credits needed for current payments and productive investment in a whole industrial sector. But the cartel also brings about a still closer relationship between banking and industry. When competition in an industry is eliminated there is, first of all, an increase in the rate of profit, which plays an important role. When the elimination of competition is achieved by a merger, a new undertaking is created which can count upon higher profits, and these profits can be capitalized and constitute promoter's profit.[1] With the development of trusts this process becomes important in two respects. First, its realization constitutes a very important motive for the banks to encourage monopolization; and second, a part of the promoter's profits can be used to induce reluctant but significant producers to sell their factories, by offering a higher purchase price, thus facilitating the establishment of the cartel. This can perhaps be expressed in the following way: the cartel exerts a demand on the enterprises in a particular branch of industry; this demand increases to a certain degree the price of the enterprises[2] and this higher price is then paid in part out of the promoter's profit."

The rest of the book, of which this is just an excerpt looks very interesting, and is available through the link, but unfortunately I've only read the above, and what's immediately linked to it, in, print in Tom Bottomore's collection "Austro-Marxism".

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