In the era of the monopoly of private capital, the capitalist obtains profit from their ownership of industrial capital, and this forms the basis of distribution – profit to the industrial capitalist, wages to the worker, interest to the money-lending capitalist, rent to the landlord, taxes to the state. As Marx sets out in Capital I and III, and in Theories of Surplus Value, the primary relation is that between capital and labour. It determines the average annual rate of surplus value, and, thereby, the average annual rate of profit, and, its only once that is determined that, rent – surplus profit – can be established, and also, that the value of capital as, now, a commodity, can be established, which is necessary in determining the rate of interest.
Surplus profit is profit in excess of the average profit. This surplus profit is usually competed away, in relation to industrial capital, but, where it depends upon the monopoly ownership of one factor of production, e.g. land, that is not possible. The owners of that factor, e.g. landlords, are able to charge a rent for use of it, up to and including the amount of the surplus profit. The value of capital, as a commodity, is equal to the average rate of profit. A machine, as a commodity, may have a value of £100, but, used as capital, this £100 machine has a value of £120, if the average rate of profit is 20%. So, the owner of the machine might loan it to a producer for a year, and charge them interest of anything up to £20.
All of these distribution relations, therefore, flow from the productive relation between capital and labour. As Marx sets out, in Capital III, in the era of the monopoly of private capital, the individual capitalist often embodied in themselves all of these owners of factors of production. They used their own money-capital to buy the land used for production; they bought the buildings, materials, machines and labour-power, and sometimes, contributed their own labour-power too. That situation, today, in the era of socialised capital/imperialism, is confined to the relics of that private capitalist production, amongst the small capitals and petty-bourgeoisie.
But, even as this era of the monopoly of private capital was in process of dissolution – the expropriation of the expropriators – it saw a middle-class of professional managers arise as “functioning capitalists”. Originally, they are employed by the private capitalist, as the scale of production expands beyond the capacity of a single capitalist. But, then, as credit develops, these managers themselves take over, or establish their own business, even though they own no capital themselves. They simply perform the social role of functioning capitalist, and borrow the required money-capital from banks, or obtain credit from suppliers etc. The profit is produced, as before, but, now, they must deduct from it the interest on the money borrowed, the rent to the landlord, and only what is left constitutes the profit of enterprise, available for capital accumulation.
In practice, these functioning capitalists would, also, supplement their own managerial salaries out of this profit of enterprise. And, finally, as the scale of capitalist production expands to such a scale that it requires the mobilisation of capital on a huge scale, as happened from the start of the railways, it can only take the form of a joint stock company, or a large cooperative. It becomes socialised capital, and, at this point, the ruling class, itself, has been removed from the production process, altogether, and becomes only a supplier of money-capital. It is this new relation that determines the new distribution relations, as it obtains its revenues, now, not from profit or profit of enterprise, not from ownership of industrial capital, but from interest/dividends and capital gains, i.e. from its ownership of fictitious capital, and it maintains this position via its control of the capitalist state.
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