Historically, the owner of capital and the operator of that capital are one and the same. The individual private capitalist originates either as a merchant, who employs wage labour, via the putting-out system, and then in the handicraft workshop and manufactory, or as the skilled artisan who employs wage labour alongside them, thereby accumulating surplus value from their employment. As capital accumulation proceeds, the working capitalist must spend more of their time managing than working. They then have to employ professional managers. Increasingly, the role in the production process becomes less and less, as this function is taken over by these professional managers, who do not own the capital they manage, and whose wages, thereby appear solely as wages paid for the specific managerial labour they provide.
Even within the confines of private capitalism, as the owners of this capital become removed from production, they see the revenue that comes to them as simply a payment for the capital they provide to the business; interest on the capital they own. But, towards the end of the 19th century, the further concentration and centralisation of capital results in the expropriation of the expropriators as the monopoly of private capital is replaced by socialised capital. Now, this separation becomes complete. The functioning capital is socialised. It becomes the property of the company itself, as an independent legal entity. The personification of this socialised functioning capital is the professional day to day manager, administrator, technician, etc., now drawn from the ranks of the educated working-class. Now, the interest-bearing capital stands in antagonistic opposition to this socialised functioning capital, and, thereby, to the personification of it, the functioning capitalists.
The personification of the interest-bearing capital is now the owner of shares, bonds and other derivative financial assets, as well as all those institutions, such as the banks and finance houses, the stock and commodity exchanges, and the financial press, which acts to centralise and concentrate the interests of these parasitic layers and their speculative activities. It is in this form that the dominant section of the ruling class hold their private wealth, and through which they exercise power and control.
The extent to which the interest-bearing capital stands in antagonistic contradiction to the functioning capital is shown by the fact that the ruling class use their political power to establish company laws on corporate governance to give them, as shareholders, control over the very capital they have temporarily sold to the company. The company law gives the shareholders, not the company, in the shape of its associated producers, the right to appoint Boards of Directors, and to determine dividend payments and so on, so as to further the interests of shareholders against the interests of the company itself.
“Consequently, insofar as any relation between surplus-value and the process is still preserved, or apparent, this is done precisely in the form in which the very notion of surplus-value is negated. Industrial profit is resolved into labour, not into unpaid labour of other people but into wage-labour, into wages for the capitalist, who in this case is placed into the same category as the wage-worker and is merely a more highly paid worker, just as in general wages vary greatly.” (p 490)
The most obvious manifestation of that is where the socialised capital takes the form of the worker owned cooperative. Here, the associated producers – labourers and managers – democratically control the functioning capital. The managers are appointed by the workers themselves, but the nature of the relation between wage labour and capital remains apparent, because, here, the task of the manager, as functioning capitalist, continues to be to maximise efficiency, so as to maximise the production of surplus value and profit, which is vital for effective capital accumulation, which, in turn, is necessary so that the cooperative can compete with other capitalist enterprises.
Even in the case of other types of cooperative, this is not the case. In the consumer cooperative, for example, it is not the associated producers that exercise control over the functioning capital but, at least in theory, the individual consumer members of the cooperative. In practice, with each individual consumer having one vote, each member being atomised from every other member, and often with the workers in the cooperative prevented from playing an active membership role, and with meetings frequently held at inconvenient times and places, participation levels are very low and real control rests in the hands of a permanent bureaucracy, able to run the enterprise as though it were their private fiefdom.
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