Burnham's Dead Cat Bounce - Part 7 - (Digression) The Era of Speculation and Gambling (4) – Capital, Profit and Capital Gain (Cont'd)

Part 7 - (Digression) The Era of Speculation and Gambling (4) – Capital, Profit and Capital Gain (Cont'd)

In the 19th century, as Marx describes, capital increasingly became seen as synonymous with loanable money-capital. Even before the private industrial capitalists abandoned their functional role in production, and became mere coupon clippers, the concept developed that it was the money-capital advanced that was the real capital, and the “natural” return to this capital, was not “profit”, but “interest”. The actual capital, i.e. the elements of the productive-capital, bought with that money-capital, and which is the real source of profit, i.e. surplus-value, was increasingly seen only to produce “profit” as a form of wages to the entrepreneur, a reward for their skill in buying low and selling high, or organising production more efficiently.

This sets up the ideological framework for the transition to the era of socialised/imperialist capital. The collective owners of that socialised/imperialist capital are the “associated producers”, i.e. the working-class in each enterprise. Just as with an orchestra, these associated producers still require someone to direct their actions, i.e. they require require day to day professional managers who are themselves drawn, increasingly, from the working-class. It is they that take on the “functional” role of the capitalist, and so its no wonder they are assigned only a form of wages as their appropriate revenue.

In fact, by the 20th century, as this army of white collar workers swelled to carry out the expanding functions of management, planning, administration, bookkeeping and so on, they were seen as receiving wages like other workers, apart from it being called a salary, and paid monthly etc. In turn, like other workers, they formed unions such as ASTMS, AUEW-TASS and so on.

But, this acts to emphasise the idea that these functioning-capitalists are only workers managing things, whereas the “real” capital is the money loaned to the company, be it by banks, the bond market or shareholders. The natural return to this “real” capital is not profit, but interest/dividends, and, as Marx says, this return is seen as accruing to it in the same way that plums are the natural fruit of the plum tree.

Yet, the reality is that this interest, like rent or taxes, could not exist unless surplus value is created in production, i.e. unless surplus labour is undertaken, the bourgeois form of which is industrial profit. Interest, rent, taxes and profit of enterprise, as Marx sets out, are just subdivisions of this industrial profit, created in production and realised in exchange.

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