Of course, a main component of the industrial capitalist, in buying low, is the price they pay for labour-power. They must confront workers so as to keep wages to a minimum and thereby raise profits. But, that is not the case for the money-lending capitalist. They do not confront labour, but the industrial capitalist. Where the industrial capitalist confronts the worker, to keep wages low and profits high, the money-lending capitalist confronts the industrial capitalist, trying to keep their interest payments high, which thereby reduces the industrial capitalists profit of enterprise.
“The conditions of labour are of course capital, only insofar as they confront the labourer as his non-property and consequently function as someone else’s property. But they can function in this way only in contradiction to labour. The antagonistic existence of these conditions in relation to labour makes their owners capitalists, and turns these conditions owned by them into capital. But capital in the hands of moneyed capitalist A does not have this contradictory character which turns it into capital and which therefore makes ownership of money appear as ownership of capital. The concrete distinct form by means of which money or a commodity is converted into capital is obliterated. Moneyed [capitalist] A does not confront the worker at all, but only another capitalist—capitalist B.” (p 460)
And, when the monopoly of private capital is burst asunder, and socialised capital takes its place, this seems all the more true. The functioning capitalist, the day to day professional manager, is not the owner of the capital. S/he is increasingly drawn from from the working-class, as only a skilled type of labourer, as mental labour is also increasingly separated, as part of a further division of labour, from manual labour. In the case of the worker-owned cooperative, it is not the functioning capitalist who owns the capital. They are themselves paid a wage as determined by the workers, who employ them to undertake that function. Yet, even here, the profit of the cooperative can appear itself to be the result of the relative skill of these managers, employed to carry out that function. Likewise, where the cooperative borrows money – including from its own members – a portion of these profits can then be seen as simply interest on this capital, paid as dividends to the members of the co-op, or else as interest to external lenders.
In the case of a joint stock company, the shareholders lend money to the company. It is this money, in the shape of the share capital that comes to be seen as the capital of the company, and the measure of its wealth, rather than the actual productive-capital, which becomes nothing more than a collection of fixed or liquid assets. The real relation of the shareholders should be no different to that of, say, a bondholder, or any other creditor of the company. They have no reason to confront the workers. They should only confront the managers of the company, seeking to ensure they obtain the market rate of interest on the money they have lent. But, in practice, in the same way that the landed aristocracy retained political power long after their social function had ended, so too with the money-lending capitalists. The landed aristocracy even after their defeats in 1832 and 1848, in parliament, continued to exert influence, and to shape the law to protect their interests. When the major private capitalists removed themselves from their social function in production, and became merely money lending capitalists, share and bondholders etc., they ensured that their political power was used to shape the way company law was framed, so as to enable them to exert control over capital they did not own. Because, of course, capital was now seen not as the actual productive-capital, which had been reduced to only a collection of assets, and was, instead, seen to be the share capital in the hands of these shareholders.
Company law enables this specific group of creditors, i.e. the shareholders, to control the company policy, to appoint Directors, and so on, to represent their interests as against the interests of the company itself. When companies are bought and sold, it is not the actual capital of the company that is bought, but its shares. Only when the assets of the company are guessed to be of higher value than the shares, is their concern to buy the company for its assets, and then for the purpose of asset stripping it. If A wants to take over company B, they simply offer to buy a sufficient quantity of B's shares, at a price that B's shareholders will accept, to give them a controlling stake in the company. There is no reason why shareholders should have this right to exercise control over capital they do not own, any more than other creditors of the company, such as bondholders, have that right. It persists because, since the latter part of the 19th century, the main form of wealth of the big private capitalists has been shares. Even where a large proportion of shares is held not by private individuals but by banks and financial institutions, for example by investment banks, and banks and shadow banks controlling pension funds, they do so on the basis of representing the same interests as the large individual shareholders. So, this dominant section of the ruling class has ensured that they have control over the economy by their continued control over its major companies. If the bourgeois political revolution of the 19th century that introduced political rights and freedoms was carried through consistently, shareholders would lose that privilege they currently exercise. Industrial democracy would ensure that companies were controlled by their workers and managers.
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