Capital III, Chapter 27 - Part 3

Marx and Engels then turn specifically to the point discussed earlier, of how the development of credit also leads to the creation of socialised capital, in the form of the joint stock company, and worker owned co-operatives.

“Thereby: 

1) An enormous expansion of the scale of production and of enterprises, that was impossible for individual capitals. At the same time, enterprises that were formerly government enterprises, become public.” (p 436)

This development of socialised capital, and the “expropriation of the expropriators”, as Marx described the process, in Capital I, is a reflection of the fact that the production process itself has become socialised. In place of the individual production, of the direct producer, had arisen co-operative labour, and production as a social process. At the same time, the individual private property of the direct producer had been expropriated by the private capitalist, who was, in turn, now being expropriated by the socialised capital of the joint stock company and co-operative.

“The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.” (p 436)

In previous chapters, it's been seen how money-capital becomes established as an independent form of capital, alongside merchant capital and productive capital. At the same time, capital becomes increasingly viewed only as money-capital, interest bearing capital, such that, whilst interest is the return to capital, profit is then merely a particular form of wage, a return to entrepreneurship. This goes along with a separation of the social function of the capitalist from their function as a provider of money-capital.

The social function of the capitalist, as entrepreneur, becomes increasingly the preserve of the professional manager. The capitalist now becomes the provider of money-capital, in the form of the purchase of shares, in the joint stock company, or the buyer of its bonds. In return for providing the use value of this money-capital, they receive, in return, a small amount of interest, in the form of a dividend on their shares, and coupon on their bonds. This is separate from the profit of enterprise, which is the return to the entrepreneur. Yet, even where the capitalist continues to operate in their functional role, their return appears to be solely from the ownership of capital.

“Transformation of the actually functioning capitalist into a mere manager, administrator of other people's capital, and of the owner of capital into a mere owner, a mere money-capitalist. Even if the dividends which they receive include the interest and the profit of enterprise, i.e., the total profit (for the salary of the manager is, or should be, simply the wage of a specific type of skilled labour, whose price is regulated in the labour-market like that of any other labour), this total profit is henceforth received only in the form of interest, i.e., as mere compensation for owning capital that now is entirely divorced from the function in the actual process of reproduction, just as this function in the person of the manager is divorced from ownership of capital.” (p 436-7)

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