Capital III, Chapter 27 - Part 7

The old, private capitalist enterprises are antagonistic to the new forms of socialised capital, because what are social means of production exist in the former still openly as private property. Yet, in reality, within the socialised forms of capital, control over these social means of production are not under social control either, but only under the control of an increasingly small number of very wealthy people, or their representatives, whether via joint stock companies or the capitalist state.

“There is antagonism against the old form in the stock companies, in which social means of production appear as private property; but the conversion to the form of stock still remains ensnared in the trammels of capitalism; hence, instead of overcoming the antithesis between the character of wealth as social and as private wealth, the stock companies merely develop it in a new form.” (p 440)

The joint stock companies appear to resolve the antagonism between capital and labour, therefore, because the capital employed as means of production, is no longer the private property of capitalists. The means of production are the property of the enterprise, not the shareholders. The shareholders are merely the owners of share capital, which they acquire as a result of lending money-capital to the enterprise, and for which, in return, they are paid interest, in the form of dividends.

This is illustrated by the fact that businesses can use their profits to buy back the shares they have issued, as a means of obtaining money-capital. In theory, a firm could buy back all of the shares it has issued, so that it would have no shareholders at all. In that case, the firm itself as a corporate entity, would own the means of production, and to the extent that there were no other owners of the business, and only workers of various kinds, the antagonism between labour and capital within the business would have been resolved. In theory, these workers, from the highest manager to the lowest unskilled worker, could then share the firm's profits exclusively amongst themselves, much as happens with John Lewis.

But, such situations are exceptions. Although also, in theory, workers can buy shares in companies, to the extent they do so individually, they lose the benefit of their greatest strength – their massive superiority in numbers.

A look at the data on the ownership of wealth shows that a minuscule percentage of the population, in developed economies, owns a preponderant amount of wealth, and that the wealth is held predominantly in the form of loanable money-capital and financial assets.. For example, Bill Gates alone has an equivalent amount of wealth to that of the poorest 40% of the population in the US combined.

It is estimated that to exercise control over a company, it is only necessary to own around 30% of the voting shares. That is because, of the other 70%, a large proportion will be held in a large number of disparate hands, many of whom will not bother to vote, and of the rest, these will be divided so that the 30% holding will be able to obtain a majority vote. In fact, in Britain, workers do own a considerable amount of this fictitious-capital. Workers pension funds amount to around £800 billion, which is equal to the share value of around 75% of the FTSE 100. But, as with the vast amount of state capital, which theoretically belongs to workers, they are allowed no control over it.

Back To Part 6

Forward To Part 8