Saturday, 10 December 2016

Capital III, Chapter 51 - Part 13

In a similar manner, the further development of capitalism reduces the private capitalist to the role of coupon clipper, rather than manager and controller of production, as this role is taken on by the salaried professional managers.

The individual capitalists who become mere money-capitalists take on the role of managing and controlling production only in a superficial sense, in that some of their number take on the role of sitting on boards of directors, or as CEO's and Chairmen of companies.

“But with this accumulation the number of rentiers, people who were fed up with the regular tension in business and therefore wanted merely to amuse themselves or to follow a mild pursuit as directors or governors of companies, also rose.” (Engels Supplement, The Stock Exchange, p 909)

In reality, as Marx set out earlier, these directors are there only to represent the interests of money-capital, as against the interests of industrial capital, represented by the professional managers.

“The so-called distribution relations, then, correspond to and arise from historically determined specific social forms of the process of production and mutual relations entered into by men in the reproduction process of human life. The historical character of these distribution relations is the historical character of production relations, of which they express merely one aspect. Capitalist distribution differs from those forms of distribution which arise from other modes of production, and every form of distribution disappears with the specific form of production from which it is descended and to which it corresponds.” (p 883)

The confusion that results in a belief that those distribution relations can be changed independently of the production relations, Marx says, stems from an ahistoric view of the labour process itself. If the labour process, in every society, is the same, whereby labour simply relates to Nature, so as to manipulate what it provides, and thereby produce all those things that society requires, then there would be no reason why society could not then distribute those products on whatever basis it so desired.

This is what lay behind the false view of J.S. Mill, as well as those of Eugene Duhring and others, as well as the Fabians. On this basis, the form of distribution ultimately comes down to a question of force. Society's wealth, on this understanding, is distributed in particular proportions, solely because some groups are able to mobilise force – including here in the purely political sense of exercising power and control in society – to bring it about.

In that case, all that is required is to redress the balance of political power, and thereby bring about a different distribution of wealth. This is the classic view of the reformist, who believes this can be done via parliament, redistributive taxation and a welfare state.

But, as Marx has demonstrated, here and throughout Capital, and as Engels demonstrated in “Anti-Duhring” such reformist dreams are utopian, and based on subjectivism. The distribution of society's wealth is not subjectively determined, as a consequence of respective power relations in society, and the application of force in some sense or other.

In fact, quite the opposite is the case. The power relations in society themselves flow from the social relations, which in turn rest upon the productive relations, and it is the objective laws, which govern production, which determine how society's wealth is not only produced, but how it is distributed.

The example of the landlord, alluded to earlier, is a good example of that. The social function, and consequent power in society, of the landlord did not disappear because the feudal lord stopped exercising political power and force in society. It ceased because agriculture itself became capitalist agriculture, organised and managed by capitalist farmers.

It was, in fact, this change in production that brought about a change in the distribution between profit and rent, and which created new political and power relations in society.

A similar transition arises as the productive relations expand to such a degree that they are no longer compatible with the existing distribution relations, represented by private capital. The individual private capitalist can only accumulate capital in line with the profit they obtain from distribution.

For each individual capitalist, a significant portion of that capital must be consumed as revenue, to meet the consumption needs of the capitalist and their family. The amount of value that the individual capitalist can devote to accumulation, therefore, becomes increasingly inadequate for the needs of accumulation, that must take place on an increasingly massive scale.

“Since the crisis of 1866 accumulation has proceeded with ever-increasing rapidity, so that in no industrial country, least of all in England, could the expansion of production keep up with that of accumulation, or the accumulation of the individual capitalist be completely utilised in the enlargement of his own business; English cotton industry as early as 1845; the railway swindles. But with this accumulation the number of rentiers, people who were fed up with the regular tension in business and therefore wanted merely to amuse themselves or to follow a mild pursuit as directors or governors of companies, also rose. And third, in order to facilitate the investment of this mass floating around as money-capital, new legal forms of limited liability companies were established wherever that had not yet been done, and the liability of the shareholder, formerly unlimited, was also reduced ± [more or less] (joint-stock companies in Germany, 1890. Subscription 40 per cent!).” (Engels Supplement, p 908-9)

This transformation of production, therefore, brings about a change of social relations, as private capital is increasingly expropriated by this new socialised form of capital, in the shape, on the one hand, of the joint stock companies, limited liability companies, trusts and corporations, and on the other by the worker owned co-operatives. But, this too brings with it changes in distribution, and in social relations.

On the one hand, the social function of the private capitalist disappears, and it is taken on by the professional manager, on the other the individual capitalist becomes transformed into a rentier, whose revenue now derives from their ownership of fictitious capital, and their power becomes centralised in the Stock Exchange and financial institutions.

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