In previous societies, the slave owners, the feudal aristocracy appear as a single political class, confronting the peasant producers. But, the capitalist appears as the personification of capital, just as the worker appears as the personification of labour, as the human representation of two agents within the productive process.
The capitalist appears in this social function as the organiser of production, as part of an hierarchy of authority, within the production process. This is why the social function of the private capitalist is replaced, during the 19th century, as capital bursts asunder the fetters imposed on it by the private ownership of capital. The joint stock companies sound the death knell of private capitalism, as it is itself subordinated and expropriated by this large scale, socialised capital, just as private capital had previously expropriated the direct producers.
At the same time, the capitalists themselves are removed from the production process completely, and turned merely into the providers of loanable money-capital, in return for shares and bonds – fictitious capital. Their social function, in the production process is increasingly taken over by professional managers, administrators and technicians, who organise production on a day to day basis, increasingly in line with scientific principles of management.
As capitalism develops public education, on an extended scale, these functioning capitalists are increasingly drawn from wider layers of society, including the working-class, so that their wages increasingly fall to more approximate those of other skilled workers.
As these functioning capitalists are the personification of productive-capital, and this conflicts with the interests of the owners of loanable money-capital, the shareholders and bondholders, so the interests of the latter are represented by the establishment of additional tiers of management over the functioning capitalists. Although the boards of directors, and their appointees, the executives of these companies, are presented as being the representatives of the interests of the company, in fact, they are only representatives of the money-capitalists, the owners of fictitious capital, charged with the responsibility of maximising shareholder value, boosting the share price etc. This is one reason these executives are as likely to use realised profits, and even additional borrowing in bond markets, to buy back shares, than to use this potential money-capital for the purpose of productive investment.
Under the regime of private capital, and unlike previous modes of production, each capital exists in competition with every other capital, and as the personification of this capital, each capitalist thereby appears not as a member of a single political class, confronting labour, but as an individual capitalist competing against others.
“... the capitalists themselves, who confront one another only as commodity-owners, there reigns complete anarchy within which the social interrelations of production assert themselves only as an overwhelming natural law in relation to individual free will.” (p 881)
In fact, as socialised capital supplants this private capital, the anarchy is itself reduced, as co-operation and planning, at an enterprise and social level increases, as one aspect of the introduction of scientific management. As Engels states,
“Capitalist production by joint-stock companies is no longer private production but production on behalf of many associated people. And when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness.”
(Critique of The Erfurt Programme)
Moreover, the owners of loanable money-capital, more notably form a single political class, because their wealth assumes a more liquid form, unattached to any specific productive-capital and able to move instantaneously anywhere in the world, to wherever the greatest total return (revenue plus capital gain) can be obtained. It provides a material basis for the creation of a truly global single, class of money-lending capitalists.
There is no necessary competition between these individual representatives of loanable money capital because their commodity, as Marx states, is homogeneous. Rather the interest of these money-lending capitalists is expressed in opposition to the interests of productive-capitalists, be they the remnants of private industrial capital, or of the ascendant socialised capital. The interests of these money lending capitalists is concentrated in the Stock Exchange, and the financial institutions.
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