“And both the restitution of the values advanced in production and, particularly, the surplus-value contained in the commodities seem not merely to be realised in the circulation, but actually to arise from it; an appearance which is especially reinforced by two circumstances: first, the profit made in selling depends on cheating, deceit, inside knowledge, skill and a thousand favourable market opportunities; and then by the circumstance that added here to labour-time is a second determining element — time of circulation. This acts, in fact, only as a negative barrier against the formation of value and surplus-value, but it has the appearance of being as definite a basis as labour itself and of introducing a determining element that is independent of labour and resulting from the nature of capital.” (p 827-8)
In this realm of exchange, competition rules on the basis of those subjective factors described above in each individual case, and that means that the outcome in each case becomes a matter of chance, rather than something which can be scientifically determined. We can think, for example, of the cases where multi-billion pound contracts have been awarded, not on the basis of the most competitive price, but as a result of corruption and bribery.
“... where, then, the inner law, which prevails in these accidents and regulates them, is only visible when these accidents are grouped together in large numbers, where it remains, therefore, invisible and unintelligible to the individual agents in production.” (p 828)
The fact that the realisation of surplus value takes place under quite different conditions from its production, that it is intermediated by the uncertainty of circulation; that as the rate of profit it appears in quite different guise to the rate of surplus value; that it is divided into profit of enterprise, interest, as well as into rent and taxes, increasingly makes the source of this surplus value disappear from view.
This is complicated further by the divergence of commodity values from prices of production and market prices, which also means that the profit obtained by an individual capital is unrelated to the surplus value produced by that capital.
“Profit seems to be determined only secondarily by direct exploitation of labour, in so far as the latter permits the capitalist to realise a profit deviating from the average profit at the regulating market-prices, which apparently prevail independent of such exploitation. Normal average profits themselves seem immanent in capital and independent of exploitation; abnormal exploitation, or even average exploitation under favourable, exceptional conditions, seems to determine only the deviations from average profit, not this profit itself.” (p 829)
The profit of enterprise appears not to arise from the extraction of surplus value from the worker, but from the labour of the functioning capitalist themselves, who performs the function of organising and supervising production – itself raised to a higher level with the scientific management methods of Taylorism. At the same time, with the increasing development of the joint stock companies and corporations, this division between the actual managers and the representatives of the money-lending capitalists becomes ever wider.
The money-lending capitalists in the shape of the share and bondholders require their own representative within the company to look after the interests of their fictitious capital, which is not at all the same as the interests of the actual industrial capital itself. The interest of the latter, represented by the functioning capitalists, i.e. the day to day managers and administrators, is to accumulate. The interest of the former is to maximise shareholder value, by maximising dividend yields, boosting share values and so on.
As Marx describes in Chapter 23, therefore, this leads to the establishment of new tiers of supervision over the functioning capitalists. They appear as the CEO, CIO, Chairman and so on, of the company, which gives the appearance that they are the representatives of this industrial capital, when, in fact, they are only the representatives of the fictitious capital. Their true nature is illustrated by the frequency with which they move to perform the same function in one company after another, irrespective of whether the company they have left has itself done well or ill, during their tenure. It is illustrated by the number of Boards of Directors on which such individuals sit simultaneously.
“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.” (Chapter 23, p 389-90)
This division is made clear, as Marx sets out, in that chapter, in the worker owned co-operatives, where the functioning capitalists were themselves appointed by the workers. The nature of these managers, as merely a specialised form of skilled labour is thereby manifest, and made more so,
“... the more these wages of supervision, 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.” (ibid)
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