Capital III, Chapter 48 - Part 10

Under capitalism, the surplus value is divided amongst the capitalists. As described earlier, in relation to the formation of a general rate of profit, each productive and merchant capital obtains a share of the total surplus, proportionate to its share of the total social capital. But, in reality, this general rate of profit can only act as a regulating law. In practice, some capitals will obtain a larger or smaller share, because some will involve greater risk etc. Moreover, as the size of capitals grows ever larger, frictions set in, so that not only is it not feasible for additional capital to simply engage in high profit activities, but equally it is not feasible for capital to exit low profit areas.

But, the development of capitalism also means that increasingly the surplus value is in any case divided between those capitalists who act as functioning capitalists – entrepreneurs as well as professional managers – and who are paid essentially a wage (profit of enterprise) and those money-lending capitalists who provide the former with the money-capital they require in return for shares and bonds.

In that case, the shareholder or bondholder receives a dividend on their shares or coupon on their bonds. Although physical, productive capital cannot now be so easily moved from low profit areas to high profit areas, to equalise the rate of profit, the share price of companies producing higher than average profits tends to rise, and of those producing below average profits tends to fall, as money-capitalists demand more shares of the former and sell more of the latter, so that the price/earnings ratio tends to be equalised.

The ultimate form of these developments as Engels describes in “Anti-Duhring”, is state capitalism. A situation in which all productive-capital is owned by the state, which effectively thereby comprises one huge corporation. The state employs “functioning capitalists”, in the shape of an army of day to day managers, administrators and technicians.

“All the social functions of the capitalist are now performed by salaried employees. 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 capitalist 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.” 

(Engels, Anti-Duhring, p 359-60)

As Marx describes, in Capital I, these functioning capitalists, the army of day to day managers, technicians and administrators, become the human representatives, the personification of this big socialised industrial capital.  It incubates all of those social-democratic ideas of meritocracy, technocracy, and bureaucracy.  As a phrase it could be summed up as harold Wilson's slogan in the 1960's, of "The White Heat of Technology".  It engenders a view of the economy and of society as being simply some kind of machine that can be adjusted and controlled, by this army of specialists. That was again seen in the 1960's spread not just of Keynesian demand management techniques, the setting up of a range of bureaucratic economic planning bodies in every developed capitalist economy, such as NEDO in Britain, but in an increasing intervention of the capitalist state in all areas of life, and not just at a national level, but increasingly at an international level too.

This administrating and mediating role of the day to day managers, administrators and technicians (including those who fulfil essentially the same role as trades union bureaucrats and social-democratic politicians) leads to this stratum seeing its world outlook as society's world outlook, i.e. one in which there is some single social interest - often also, therefore, a national interest - and in which any conflicts, including class conflicts, are really just a result of misunderstanding, and lack of information, which can then be negotiated away.

“The peculiar character of social-democracy is epitomized in the fact that democratic-republican institutions are demanded as a means, not of doing away with two extremes, capital and wage labour, but of weakening their antagonism and transforming it into harmony. However different the means proposed for the attainment of this end may be, however much it may be trimmed with more or less revolutionary notions, the content remains the same. This content is the transformation of society in a democratic way, but a transformation within the bounds of the petty bourgeoisie. Only one must not get the narrow-minded notion that the petty bourgeoisie, on principle, wishes to enforce an egoistic class interest. Rather, it believes that the special conditions of its emancipation are the general conditions within whose frame alone modern society can be saved and the class struggle avoided. Just as little must one imagine that the democratic representatives are indeed all shopkeepers or enthusiastic champions of shopkeepers. According to their education and their individual position they may be as far apart as heaven and earth. What makes them representatives of the petty bourgeoisie is the fact that in their minds they do not get beyond the limits which the latter do not get beyond in life, that they are consequently driven, theoretically, to the same problems and solutions to which material interest and social position drive the latter practically. This is, in general, the relationship between the political and literary representatives of a class and the class they represent.”

(The Eighteenth Brumaire of Louis Bonaparte)

Nor was it just politicians within social-democratic parties that pioneered such policies.  Harold MacMillan, in the 1930's had developed many of the ideas about such state intervention that were adopted by Conservative governments in the post-war period, and which are being dusted off by Theresa May today.

At the same time, the state obtains money-capital from a class of rentier money-capitalists, now freed from the mundane tasks of management. They provide loanable money-capital to the state now solely in the shape of the purchase of its bonds, on which they obtain a guaranteed coupon – interest. They in turn are the human embodiment of this loanable money-capital, and personification of its interests. 

Just as in the large joint stock companies, their interests are represented by the board of directors, and top level executives placed above the functioning capitalists, so in the state they are represented by an equivalent body of high level bureaucrats drawn from a similar background, and with the same world outlook.

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