Wednesday, 1 January 2020

Theories of Surplus Value, Part III, Addenda - Part 22

[3. The Separation of Individual Parts of Surplus-Value in the Form of Different Revenues. The Relation of Interest to Industrial Profit. The Irrationality of the Fetishised Forms of Revenue] 

If we take the total social capital, as a whole, the total profit is equal to the total surplus value, but each capital shares the total profit proportionately, based on the average rate of profit. For each individual capital, then, this profit divides into two parts. One part is what is appropriated by the money-lending capitalist as interest. The other part is then what is termed industrial profit, or profit of enterprise. Where the capital is socialised capital, in the form of a worker owned cooperative, its clear that this profit is a fund available to the cooperative itself, for accumulation etc. It is a separate fund to that from which the wages of the professional managers are paid, for their labour in acting to organise and coordinate production. But, elsewhere, this industrial profit, or profit of enterprise, is also used to pay, under the cover of wages, revenue to the capitalists and their agents. 

Rather than being seen to simply appropriate increasing amounts of profit, without providing anything in exchange, the industrial capitalist pays themselves an amount of “wages of superintendence” out of the profits. As the cooperative shows, labour is indeed required to organise and coordinate production. As Marx describes it, it is like the labour of the conductor of an orchestra. It is value creating labour, and thereby funded out of the variable-capital. But, the private capitalist, in addition to this necessary labour, also performs labour that is only required because of the antagonistic relation that exists between capital and labour, in the labour process. What the private capitalist pays to themselves as wages for this labour is not funded out of variable-capital, but out of the surplus value. It is a cost of producing the surplus value specific to the antagonistic nature of production based upon capitalist private property. 

When the private capitalist steps aside from production and hands over their social function to professional managers, this division of function remains. A part of the managers' wages still, therefore, being funded from variable-capital, a part from profit. In socialised capitals, such as joint stock companies, corporations etc., most, if not all, of the wages paid to these functioning capitalists, the day to day managers, technicians, administrators, etc. is funded from variable-capital, and, as Marx sets out, in Capital III, Chapter 17, the more these functions are taken on by an increasingly educated working-class, the more these wages even fall to levels below that of other skilled workers. But, as these companies grow larger, and the private capitalists hold their wealth in the form of fictitious capital, of shares etc., the more they require special functionaries to protect their interests, as shareholders, owners of interest-bearing capital, as against the actual functioning capitalists, whose function is to maximise profit and accumulation, rather than its appropriation as interest/dividends by shareholders. The shareholders, therefore, use their political power to ensure that company law gives them, not the company, the right to appoint Boards of Directors, who determine company policy, including remuneration of directors, and payment of dividends etc. 

The huge salaries paid to these directors are payments funded entirely from the profits, and in any calculation of profits, and the rate of profit have to be treated as such. 

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