In Friedrich Engels Socialism, Utopian and Scientific, he talks about trusts, cartels, and joint stock companies.   The book is from 1883.  The relevant passages read:

“As a matter of fact, since 1825, when the first general crisis broke out, the whole industrial and commercial world, production and exchange among all civilized peoples and their more or less barbaric hangers-on, are thrown out of joint about once every 10 years. Commerce is at a stand-still, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. Little by little, the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit, and speculation, which finally, after breakneck leaps, ends where it began — in the ditch of a crisis. And so over and over again. We have now, since the year 1825, gone through this five times, and at the present moment (1877), we are going through it for the sixth time. And the character of these crises is so clearly defined that Fourier hit all of them off when he described the first “crise plethorique”, a crisis from plethora.”

“In these crises, the contradiction between socialized production and capitalist appropriation ends in a violent explosion. The circulation of commodities is, for the time being, stopped. Money, the means of circulation, becomes a hindrance to circulation. All the laws of production and circulation of commodities are turned upside down. The economic collision has reached its apogee. The mode of production is in rebellion against the mode of exchange.“

“The fact that the socialized organization of production within the factory has developed so far that it has become incompatible with the anarchy of production in society, which exists side by side with and dominates it, is brought home to the capitalist themselves by the violent concentration of capital that occurs during crises, through the ruin of many large, and a still greater number of small, capitalists. The whole mechanism of the capitalist mode of production breaks down under the pressure of the productive forces, its own creations. It is no longer able to turn all this mass of means of production into capital. They lie fallow, and for that very reason the industrial reserve army must also lie fallow. Means of production, means of subsistence, available laborers, all the elements of production and of general wealth, are present in abundance. But “abundance becomes the source of distress and want” (Fourier), because it is the very thing that prevents the transformation of the means of production and subsistence into capital. For in capitalistic society, the means of production can only function when they have undergone a preliminary transformation into capital, into the means of exploiting human labor-power. The necessity of this transformation into capital of the means of production and subsistence stands like a ghost between these and the workers. It alone prevents the coming together of the material and personal levers of production; it alone forbids the means of production to function, the workers to work and live. On the one hand, therefore, the capitalistic mode of production stands convicted of its own incapacity to further direct these productive forces. On the other, these productive forces themselves, with increasing energy, press forward to the removal of the existing contradiction, to the abolition of their quality as capital, to the practical recognition of their character as social production forces.

“This rebellion of the productive forces, as they grow more and more powerful, against their quality as capital, this stronger and stronger command that their social character shall be recognized, forces the capital class itself to treat them more and more as social productive forces, so far as this is possible under capitalist conditions. The period of industrial high pressure, with its unbounded inflation of credit, not less than the crash itself, by the collapse of great capitalist establishments, tends to bring about that form of the socialization of great masses of the means of production which we meet with in the different kinds of joint-stock companies. Many of these means of production and of distribution are, from the outset, so colossal that, like the railways, they exclude all other forms of capitalistic expansion. At a further stage of evolution, this form also becomes insufficient. The producers on a large scale in a particular branch of an industry in a particular country unite in a “Trust”, a union for the purpose of regulating production. They determine the total amount to be produced, parcel it out among themselves, and thus enforce the selling price fixed beforehand. But trusts of this kind, as soon as business becomes bad, are generally liable to break up, and on this very account compel a yet greater concentration of association. The whole of a particular industry is turned into one gigantic joint-stock company; internal competition gives place to the internal monopoly of this one company. This has happened in 1890 with the English alkali production, which is now, after the fusion of 48 large works, in the hands of one company, conducted upon a single plan,…“

“In the trusts, freedom of competition changes into its very opposite — into monopoly; and the production without any definite plan of capitalistic society capitulates to the production upon a definite plan of the invading socialistic society. Certainly, this is so far still to the benefit and advantage of the capitalists. But, in this case, the exploitation is so palpable, that it must break down. No nation will put up with production conducted by trusts, with so barefaced an exploitation of the community by a small band of dividend-mongers.

“In any case, with trusts or without, the official representative of capitalist society — the state — will ultimately have to undertake the direction of production. ^[4] This necessity for conversion into State property is felt first in the great institutions for intercourse and communication — the post office, the telegraphs, the railways.

“If the crises demonstrate the incapacity of the bourgeoisie for managing any longer modern productive forces, the transformation of the great establishments for production and distribution into joint-stock companies, trusts, and State property, show how unnecessary the bourgeoisie are for that purpose. All the social functions of the capitalist has no further social function than that of pocketing dividends, tearing off coupons, and gambling on the Stock Exchange, where the different capitalists despoil one another of their capital. At first, the capitalistic mode of production forces out the workers. Now, it forces out the capitalists, and reduces them, just as it reduced the workers, to the ranks of the surplus-population, although not immediately into those of the industrial reserve army.

Friedrich Engels Socialism, Utopian and Scientific

Chapter 3

So essentially by 1883 this was visible, the transition of capitalism to what Lenin would call ”imperialism”, in Imperialism, the Highest Form of Capitalism, in 1917.  In 1883 Karl Marx died, and it is not clear what condition he was in near the end of his life, and if he cooperated with Engels to write the book just quoted from.  

Anyhow, the presence of monopoly trusts and joint stock companies is alive and well in Milwaukee, Wisconsin in June of 2024.   The electric and gas company, Wisconsin Electric, owns the electric and natural gas factories, with no competition.  They seem to determine the price, and own the power lines too.  It has been like this as long as I can remember.

Also the cable company Charter (Verizon)  is currently in a cartel with AT&T and the  other cable companies to keep the government from capping the fee for low income people to get internet at $30.  AT&T is good at running monopolies.

“AT&T officially broke up on Jan. 1, 1984. Its 22 members were formed into seven independent Regional Holding Companies or the Baby Bells.”

Google search ATT break up to baby bells

Dec 7, 2020

So AT&T is no stranger to organizing trusts, which is what we see:

“AT&T, Charter, Comcast and Verizon are quietly trying to weaken a $42.5 billion federal program to improve internet access across the nation, aiming to block strict new rules that would require them to lower their poorest customers’ monthly bills in exchange for a share of the aid.”

“In state after state, the telecom firms have blasted the proposed price cuts as illegal — forcing regulators in California, New York, South Carolina, Tennessee, Virginia and elsewhere to rethink, scale back or abandon their plans to condition the federal funds on financial relief for consumers.

Washington Post April 15 2024

https://www.washingtonpost.com/business/2024/04/15/telecom-lobbying-price-caps-broadband/

Article continues:

NCTA – the Internet & Television Association, whose members include Charter and Comcast, would be the name of the trust this group is being called.  

“In detailed guidelines issued in 2022, the Biden administration suggested that internet plans should cost consumers no more than $30 per month — though it allowed local officials to propose alternatives.”

“The opposition underscores the vast power and reach of the telecom industry, one of the most formidable political forces in capitals across the country. “

Ibid.

Here we have AT&T, Comcast, and Charter, all together to fight lower cost internet.  Their fixed price in New York is now $65 for internet, and it interferes with their ability to create surplus value if they have to provide cheap internet.  

One may ask why a state program to cap internet prices, and to pay state money to ATT would bother them.

The answer to this is obviously taxes are a part of the surplus value, a division of this.  This is why AT&T, Comcast, and Charter have built a trust, they are trying to refuse to pay part of their surplus value to make the internet affordable to low income people. 

The evidence is precisely what AT&T is doing now, which is to try to build a cartel like they had in telephones with their internet cable business, prior to being broken up in 84.

Lenin wrote in 1917

“Cartels come to an agreement on the terms of sale, dates of payment, etc. They divide the markets among themselves. They fix the quantity of goods to be produced. They fix prices. They divide the profits among the various enterprises, etc. “

“Competition becomes transformed into monopoly. The result is immense progress in the socialisation of production. In particular, the process of technical invention and improvement becomes socialised. “

“The German economist, Kestner, has written a book especially devoted to “the struggle between the cartels and outsiders”, i.e., the capitalists outside the cartels. He entitled his work Compulsory Organisation, although, in order to present capitalism in its true light, he should, of course, have written about compulsory submission to monopolist associations. It is instructive to glance at least at the list of the methods the monopolist associations resort to in the present-day, the latest, the civilised struggle for “organisation”: (1) stopping supplies of raw materials … (“one of the most important methods of compelling adherence to the cartel”); (2) stopping the supply of labour by means of “alliances” (i.e., of agreements between the capitalists and the trade unions by which the latter permit their members to work only in cartelised enterprises); (3) stopping deliveries; (4) closing trade outlets; (5) agreements with the buyers, by which the latter undertake to trade only with the cartels; (6) systematic price cutting (to ruin “outside” firms, i.e., those which refuse to submit to the monopolists. Millions are spent in order to sell goods for a certain time below their cost price; there were instances when the price of petrol was thus reduced from 40 to 22 marks, i.e., almost by half!); (7) stopping credits; (8) boycott.

“Here we no longer have competition between small and large, between technically developed and backward enterprises. We see here the monopolists throttling those who do not submit to them, to their yoke, to their dictation. This is how this process is reflected in the mind of a bourgeois economist:

“Even in the purely economic sphere,” writes Kestner, “a certain change is taking place from commercial activity in the old sense of the word towards organisational-speculative activity. The greatest success no longer goes to the merchant whose technical and commercial experience enables him best of all to estimate the needs of the buyer, and who is able to discover and, so to speak, ‘awaken’ a latent demand; it goes to the speculative genius [?!] who knows how to estimate, or even only to sense in advance, the organisational development and the possibilities of certain connections between individual enterprises and the banks. . . .”

“Translated into ordinary human language this means that the development of capitalism has arrived at a stage when, although commodity production still “reigns” and continues to be regarded as the basis of economic life, it has in reality been undermined and the bulk of the profits go to the “geniuses” of financial manipulation. At the basis of these manipulations and swindles lies socialised production; but the immense progress of mankind, which achieved this socialisation, goes to benefit . . . the speculators.”

Lenin Imperialism, the Highest Form of Capital

Chapter one

Here we see Lenin reaffirming what Engels said about joint stock companies, trusts, cartels.  Speculation becomes an integral part of commodity production, the Stock Exchange becomes a center of imperialist activity.  The banks use credit in the form of massive amounts of capital, channeled through investment bankers who gamble on joint stock assets on the financial markets.  Speculation runs rife, large bureaucracy becomes the norm for financial capital.  The banks include huge luxury office space in skyscrapers; a class who no longer labours at creating commodities, rather exists by drawing interest from production of commodities,  becomes ascendant to control of markets.  

Sometimes the state is in control of production, like railroads and the Post Office.

“In any case, with trusts or without, the official representative of capitalist society — the state — will ultimately have to undertake the direction of production. ^[4] This necessity for conversion into State property is felt first in the great institutions for intercourse and communication — the post office, the telegraphs, the railways.”

Engels ibid. see above

The passenger railroad Amtrak is nationalized property, the bourgeoisie cannot get it together to build passenger railroads anymore. The state run Amtrak runs on freight lines often.  The freight lines in the west are all owned by two large companies, Union Pacific and BNSF, the latter owned by Warren Buffett’s Berkshire Hathaway. I don’t really know how much competition there is between Union Pacific and BNSF, but with a duopoly, you can only  imagine. 

How close to state ownership like Amtrak these railroads are is a matter of opinion.  They are both joint stock companies,  Buffet controls the BNSF, and is not an engineer.  Rather he controls financial capital, as a sort of banker.  He invests capital gained through production for surplus value, gained through his exploitation of the proletariat.

If Amtrak could make a profit, it would no longer be owed by the state.  But even if it was not state owned, it would probably be spun off into one company or two, and would be a monopoly.  Capitalists are way to connected to producing automobiles to produce railroads.  

The Post Office, where the bills from our monopolized companies are sent to us through, is owned by the state. It is not an example of socialism, taxes are also paid through it. It is an essential part of the capitalist system, it is just not making a profit.  They hire veterans who are supportive of the capitalist  system to run it, they get favored status on the entrance exam.  Its leadership is picked by the White House, by capitalists. 

Even if the industry is state owned, it is still part of capitalism.  In this respect it is also a monopoly, the Post Office sets prices for mail delivery.  Of late it has been receiving some competition from UPS, the private post office, which delivers packages. It is an attempt to remove business from the state owned post office, which now moves mostly letters. But the postage rate is set by the capitalist state. 

“Prices and fees are then subject to review by the Postal Regulatory Commission (PRC), an independent agency created by the Postal Accountability and Enhancement Act of 2006 (PAEA) as a successor to the former Postal Rate Commission.

Google search post office rates governed by

June 19 2024

Which means the prices are set by the PRC, not by competition. Here we have the state company determining prices, controlled by capitalists.

Once Marx wrote Capital, he showed very clearly how the capitalist system was functioning.   This was 1863, and it is still relevant, in particular in the east, where capitalism is returning.

But the presence of trusts, cartels, joint stock companies, etc. is a more recent development.  Engels saw it, and Lenin later based his writing on Engels.  He developed Engels works further, when history had proven Engels correct.  The trusts are all real, the speculation part of capitalism.  Engels was correct,  Lenin picked up on this.

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic