V. I.

Lenin

Capitalists are not inclined to be frank about their in
comes. “Commercial secrets” are strictly guarded and it is very difficult
for the uninitiated to penetrate the “mysteries” of how riches are piled
up. Private property is sacred—no body is permitted to meddle in the
affairs of its owner. Such is the principle of capitalism.

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 prevent ed 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.