Tuesday, 19 January 2016

Capital III, Chapter 23 - Part 8

The functioning capitalist, i.e. the managers actually carrying out the day to day function of managing and directing the labour process are thereby brought closer to the other productive labourers, and that is all the more clear in the case of the worker co-operative, where the managers are themselves employed by the workers to carry out that function.

In the 1970's, I worked for a large industrial company that had operations in South Africa, Australia, the US, and Canada. It was a good example of the points Marx makes here. On the one hand, as an office worker, I was a member of the Association of Scientific, Technical and Managerial Staffs (ASTMS), which was one of the more radical unions of the time. Certainly, it was more radical than the manual workers union, in the industry in which I worked. The most active members of my union branch were themselves the production managers, some of whom were members of the Communist Party, as well as others being active Labour Party members. The Branch Secretary was a production manager who lived in a council house on the biggest, most deprived, council estate in the city, at Bentilee.

But, illustrating another point that Marx makes here, above these actually functioning managers arises, within these companies, other tiers of management, but whose remuneration seems to rise in inverse proportion to the work they do, and proximity to the actual productive process.

Illustrating the contradictions that arise, these higher boards of directors are intended to represent the interest of money-capital, of shareholders, but increasingly represent their own interest, at the expense of the share-owners, as cases such as TYCO, Enron etc. demonstrate. In many ways, these bureaucracies occupy a similar position that their equivalents hold within the capitalist state, as representatives of money-capital, and thereby constrained in their actions, but simultaneously seeking to further their own private, and collective bureaucratic interests, and thereby needing, periodically, to be kept in check.

So, for example, every so often a notice would appear on the notice board that this or that director had now also been appointed to the board in the US, Canada or South Africa etc. There was no way they were going to be attending any of the meetings, other than on the most infrequent basis, and yet, simply for being appointed, to each of these boards, they were paid £5,000 p.a., which does not seem much today, but back then was more than twice the average wage.

Firstly, assuming the average profit to be given, the rate of the profit of enterprise is not determined by wages, but by the rate of interest. It is high or low in inverse proportion to it.

, the functioning capitalist derives his claim to profits of enterprise, hence the profit of enterprise itself, not from his ownership of capital, but from the function of capital, as distinct from the definite form in which it is only inert property. This stands out as an immediately apparent contrast whenever he operates with borrowed capital, and interest and profit of enterprise therefore go to different persons. The profit of enterprise springs from the function of capital in the reproduction process, hence as a result of the operations, the acts by which the functioning capitalist promotes this function of industrial and commercial capital.” (p 379-80)

The distinction here then is of revenue deriving from ownership of property – capital – in the case of interest, but deriving from function in the case of profit of enterprise. For the functioning capitalist, therefore,

“He necessarily conceives the idea for this reason that his profit of enterprise, far from being counterposed to wage-labour and far from being the unpaid labour of others, is itself rather a wage or wages of superintendence of labour, higher than a common labourer's, 1) because the work is far more complicated, and 2) because he pays them to himself. The fact that his function as a capitalist consists in creating surplus-value, i.e., unpaid labour, and creating it under the most economical conditions, is entirely lost sight of in the contrast that interest falls to the share of the capitalist even when he does not perform the function of a capitalist and is merely the owner of capital; and that, on the other hand, profit of enterprise does fall to the share of the functioning capitalist even when he is not the owner of the capital on which he operates. He forgets, due to the antithetical form of the two parts into which profit, hence surplus-value, is divided, that both are merely parts of the surplus-value, and that this division alters nothing in the nature, origin, and way of existence of surplus-value.” (p 380)

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