The Growth of Capitalist Wealth

Capital, however, has long since overstepped the bounds of private property and introduced joint-stock companies. Hundreds and thousands of shareholders who do not know each other make up a single enterprise; and these property-owners are quite often diddled by smart businessmen who empty the pockets of their business partners using "commercial secrets" as a cover.

Sacred private property has been forced to sacrifice a bit of its sacredness; laws have had to be made compelling joint-stock companies to keep proper books and publish the chief results of their accountancy. This, of course, has not prevented the public being swindled; the swindling has merely taken new forms and become more subtle than before. Big capital, gathering around itself small sums of shareholders' capital from all over the world, has become more powerful still. Through the joint-stock company, the millionaire now has at his disposal not only his own million, but additional capital of, say, 800,000 rubles that may have been gathered from 8,000 petty proprietors.

This makes the absurdity of capitalism much clearer to the masses of the population.

Take, for example, the published reports of insurance companies in Russia over a period of ten years, from 1902 to 1911.

In 1902 share capital amounted to 31.3 million rubles (in 21 joint-stock companies), and in 1911 (in the same 21 companies) it was 34.8 million rubles. The greater part of the capital usually belongs to a handful of millionaires. Ten or twenty magnates perhaps hold shares for eighteen million rubles, which, gives them a majority vote, and they can, without any control, dispose of the other thirteen or sixteen million rubles belonging to "small" shareholders.

The professors who defend capitalism chatter about the increase in the number of property-owners when they see a growth in the number of small shareholders. What actually happens is that the power (and the income) of the millionaire magnates over the capital of the "small fry" is increased.

Just see how our insurance kings have expanded in the course of this ten years, The average dividend on share capital for the ten years was more than 10 per cent! Not a bad profit, eh? In the worst year of the decade they "earned" six kopeks in the ruble, and in the best year twelve kopeks!

Reserve capital was doubled—in 1902 it amounted to 152,000,000 rubles and in 1911 to 327,000,000 rubles. Property was almost doubled as well—in 1902 it was valued at 44,000,000 rubles and in 1911 at 76,000,000 rubles.

The result—in ten years in twenty-one companies, 32,000,000 rubles' worth of new property!

Who "earned" this property?

Those who did not work, the shareholders, and first and foremost the millionaire magnates who hold most of the shares.

The work was done by hundreds of employees, who canvassed insurance clients, inspected their property and laboured over the accounts. These employees remained employees. They do not receive anything more than their salaries (which, as we know, are in the majority of cases insufficient even to maintain a family decently). They cannot accumulate any property.

If any of the magnates did a bit of "work" as a director, he received special remuneration in the form of a ministerial salary and bonuses.

The gentlemen holding the shares grew rich for not working. During the decade they received on the average three millions a year net profit for the "toil" of clipping coupons, and accumulated additional capital to the tune of thirty-two million rubles.