“... the mere manager who has no title whatever to the capital, whether through borrowing it or otherwise, performs all the real functions pertaining to the functioning capitalist as such, only the functionary remains and the capitalist disappears as superfluous from the production process.” (p 388)
This is manifest in the workers' co-operatives. There, the manager's wages form part of the variable capital. Even though they were frequently charged higher rates of interest than private capital, Marx says they invariably made higher than average profit, because of “greater economy in the application of constant capital.” (p 388) Connolly makes the same point about the co-operative at Ralahine. The same thing is seen today in that worker owned co-operatives and worker owned enterprises generally, have made profits 10% above the profits of FTSE 100 companies.
Marx points out that this was true also of some joint stock companies compared to privately owned companies.
For the actual day to day, practical managers, as with the commercial workers, referred to previously, their wages are continually eroded, as the spread of education makes greater numbers of workers available, as a supply of labour-power to undertake this function. These wages,
“... like any other wage, found their definite level and definite market-price, on the one hand, with the development of a numerous class of industrial and commercial managers, and the more they fell, on the other, like all wages for skilled labour, with the general development which reduces the cost of production of specially trained labour-power. With the development of co-operation on the part of the labourers, and of stock enterprises on the part of the bourgeoisie, even the last pretext for the confusion of profit of enterprise and wages of management was removed, and profit appeared also in practice as it undeniably appeared in theory, as mere surplus-value, a value for which no equivalent was paid, as realised unpaid labour. It was then seen that the functioning capitalist really exploits labour, and that the fruit of his exploitation, when working with borrowed capital, was divided into interest and profit of enterprise, a surplus of profit over interest.” (p 389)
Marx quotes Thomas Hodgskin,
“Masters are labourers as well as their journeymen. In this character their interest is precisely the same as that of their men. But they are also either capitalists, or the agents of the capitalists, and in this respect their interest is decidedly opposed to the interests of the workmen." (p. 27). "The wide spread of education among the journeymen mechanics of this country diminishes daily the value of the labour and skill of almost all masters and employers by increasing the number of persons who possess their peculiar knowledge" (p. 30, Hodgskin, Labour Defended Against the Claims of Capital, etc., London, 1825).” (Note 78, p 389),
and J.S. Mill
“The general relaxation of conventional barriers, the increased facilities of education tend to bring down the wages of skilled labour instead of raising those of the unskilled." (J. St. Mill, Principles of Political Economy, 2nd ed., London, 1849, I, p. 479.)” (Note 79, p 389)
But, as stated earlier, the more the practical, day to day managers are thereby reduced to being mere productive labourers, little distinguished from the other workers, the more capital needs to ensure the representation of its own interests, by placing its own supervisors over the managers.
“On the basis of capitalist production a new swindle develops in stock enterprises with respect to wages of management, in that boards of numerous managers or directors are placed above the actual director, for whom supervision and management serve only as a pretext to plunder the stockholders and amass wealth. Very curious details concerning this are to be found in The City or the Physiology of London Business; with Sketches on Change, and the Coffee Houses, London, 1845.
'What bankers and merchants gain by the direction of eight or nine different companies, may be seen from the following illustration: The private balance sheet of Mr. Timothy Abraham Curtis, presented to the Court of Bankruptcy when that gentleman failed, exhibited a sample of the income netted from directorship ... between £800 and £900 a year. Mr. Curtis having been associated with the Courts of the Bank of England, and the East India House, it was considered quite a plum for a public company to acquire his services in the boardroom' (pp. 81, 82).
The remuneration of the directors of such companies for each weekly meeting is at least one guinea. The proceedings of the Court of Bankruptcy show that these wages of supervision were, as a rule, inversely proportional to the actual supervision performed by these nominal directors.” (p 389-90)
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“On the basis of capitalist production a new swindle develops in stock enterprises with respect to wages of management, in that boards of numerous managers or directors are placed above the actual director, for whom supervision and management serve only as a pretext to plunder the stockholders and amass wealth. Very curious details concerning this are to be found in The City or the Physiology of London Business; with Sketches on Change, and the Coffee Houses, London, 1845.
'What bankers and merchants gain by the direction of eight or nine different companies, may be seen from the following illustration: The private balance sheet of Mr. Timothy Abraham Curtis, presented to the Court of Bankruptcy when that gentleman failed, exhibited a sample of the income netted from directorship ... between £800 and £900 a year. Mr. Curtis having been associated with the Courts of the Bank of England, and the East India House, it was considered quite a plum for a public company to acquire his services in the boardroom' (pp. 81, 82).
The remuneration of the directors of such companies for each weekly meeting is at least one guinea. The proceedings of the Court of Bankruptcy show that these wages of supervision were, as a rule, inversely proportional to the actual supervision performed by these nominal directors.” (p 389-90)
Back To Part 11
Forward To Chapter 24
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