The “Four Cs”: Commodities, Currency (Money), Capital, and Corporations

POSITIVE DEFINITIONS

First we can state briefly what these objects concretely are, so that we can then spell out exactly what they are not.

Commodity — A commodity is any product that is produced for sale on the market, i.e. for the sake of exchange.  Like any other product (non-commodities included), it has a certain utility, or “use-value.”  Products, regardless of their salability, tend to be useful in some way or another, to satisfy a certain need.  Use-values are of a qualitative nature.  That is to say, they are useful because they possess certain utile qualities.

Unlike other products, however, commodities also possess a certain value, or “exchange-value.”  As soon as a product becomes available for exchange on the market, it is thereby converted into a commodity.  Exchange-values are of a quantitative nature.  That is to say, they are valuable because they possess a certain quantity of value.

(It must be noted, however, that if a commodity loses its use-value, i.e. becomes broken or useless, it simultaneously loses any exchange-value it might have had).

How is this quantity of exchange-value determined? What is the basis for the following equation: 20 yards of linen = 1 coat? In terms of their material qualities, the two are totally incommensurable.  A coat may be made of linen, but a single coat does not require 20 yards of linen to produce.  Nevertheless, their quantitative equality presupposes an underlying qualitative identity of substance.  The question thus becomes: What exactly is this substance?

The substantial basis for the equality of two dissimilar items or use-values is the amount of labor-power expended upon them, measured in homogeneous units of time (days, hours, minutes, etc.).  This alone determines the magnitude of value that a commodity possesses.

Commodities are not unique to capitalism.  They preexist the crystallization of the capitalist social formation.  However, in precapitalist societies, the majority of goods that are produced are not commodities.  In other words, most products are intended for immediate use or consumption, either by their producer himself or his next-of-kin.  Society’s general mode of production is only properly called “capitalist” when the majority of its products are commodities.

One final point about the commodity-form should be made before passing on to money.  This concerns the extent to which one’s labor (or more specifically, one’s labor-time) can itself be sold as a commodity on the market.  An employer purchases a certain duration of a person’s labor-time in exchange for the services rendered or products produced.  In return, the employee is typically compensated by hourly wages or an annual salary.

Though wage-labor existed in the margins of precapitalist society, the reproduction of the capitalist mode of production requires that there exists a large displaced population of persons whose only commodity available for sale is their labor.  Thus, under capitalism, wage-labor or salaries becomes generalized as the societal norm.

Currency/Money — Money is a certain commodity that is set aside to serve as a universal measurement of value.  It is the universal equivalent of qualitatively dissimilar commodities.  Money therefore serves as a quantitative medium of exchange.

In another sense, money (as such) is the circulation of commodities.  That is to say, it provides the means by which the exact quantity of one commodity is traded for an exact equivalent quantity of money, which is then used to purchase a given quantity of another.  Money acts as an intermediary in place of direct barter.

This operation can be illustrated by a simple formula, using these symbols:

C = Commodity.

M = Money.

C → M → C.

One commodity is sold for its value in money, which is then used to purchase an equivalent value in another commodity.  This allows for a more equitable exchange of value between commodities than took place in simple barter, which tended to involve uneven transactions.

Capital — Capital is self-valorizing value.  In other words, it is value that becomes more value, or money (which is but an expression of value) that magically transforms itself into more money.  The principle of capitalization is that you start the day with a certain amount of money, and by the end of the day you have more money.

As Marx put it, this process is almost “theological.”  In capital, value becomes at once the subject and object of its own activity, ceaselessly augmenting its own magnitude.  The analogy Marx uses is the differentiation of God the Father from God the Son in the triune theology of traditional Christianity; they are both made from the same substance, and are equally old, yet one begets the other.

The ultimate expression of capital in all its forms is the following:

M → Mº.

(º = “prime.”  Money “prime” signifies the increment of value over and above the amount of value originally advanced.  Once thrown back into the circuit of production and circulation, however, this augmented money or value obtained as a result of capitalization becomes the starting value of the new formula).

Species of Capital

1. Interest-bearing (usurers’) capital — M → Mº.  This is the basic formula of money lending or usury.

A certain amount of money is advanced as a loan, in return for a greater amount of money to be received later, the magnitude of which is determined by a contractually agreed-upon interest rate.

2. Commercial (merchants’) capital — M → C → Mº.  In its most simple form, this just involves the purchase of a commodity for a certain amount of money and its resale for a greater amount of money.

This can be accomplished in any number of ways.  First, a merchant can simply find a chump who is willing to either sell a commodity for less than its value, or a chump who is willing to buy a commodity for greater than its value.

A more calculated approach might involve the purchase of a commodity in a locale where it is abundant (where it is not as highly valued), and then transport it for sale in a locale where the commodity is scarce (where it is more highly valued).  The difference between the money originally paid and the money received at the end of this cycle is the surplus value.

3. Industrial capital — M → C → Mº.  Formally, this circuit is identical with that of merchants’ capital.  The crucial difference consists in the nature of the commodity purchased.  In the movement of industrial capital, the commodity bought is always the labor-time of another person.

Thus, the formula for industrial capital may perhaps be more properly described as M → C(L) → Mº.

Obviously, in this formula the following symbolism is used:

L = Labor.

The labor-time expended by the worker imparts greater value onto the articles under production, thus augmenting the original value of the commodities involved.

Two methods can be used to extract surplus-value in this process:

1. Absolute surplus-value — The capitalist extends the length of the working day, so that the worker invests an amount of labor-time into production greater than the value he receives in wages.  Once the commodities produced in this process are sold in circulation on the market, the surplus-value gained thereby is “realized.”

2. Relative surplus-value — The capitalist reduces the amount of time required to impart a certain amount of value into production below the average of the social aggregate.  This is accomplished by either revolutionizing the social organization of the division of labor or by overhauling the technical means of production.  As a result, the capitalist is able to sell the commodities produced at a level lower than the social average while still realizing the same amount of surplus-value.

Of course, once these new methods of heightened productivity are generalized throughout society, the advantage gained vanishes.  This necessitates a constant revolutionization of the technologies and organization used in production, and an accelerating pace of modernization.  This gives rise to what Moishe Postone has called the “treadmill effect” of capitalism.

4. Finance capital — M_x → M → C → Mº → Mº_x.  In this formula:

x = ^x/₁₀₀, where x ≤ 100.

Finance capital operates by having investors contribute a percentage of the overall money used to supervalue the value originally inserted into the circuit.  Typically, finance is invested into industry, where again the commodity purchased is labor.  Thus, the formula in this instance would appear as M_x → M → C(L) → Mº → Mº_x.

Corporation — A corporation is an association of capitalists who jointly share ownership of a single enterprise.  This is achieved by making shares of the company’s ownership available for purchase by the public.  Historically, this is connected to the rise of the join-stock exchange in the middle of the nineteenth century.  While corporations tend to be much larger and more visible than smaller private businesses, both operate according to the logic of capital.

NEGATIVE DEFINITIONS

Now that we have indicated what these terms are, we can safely say what they are not, in order to clear up some common misconceptions surrounding them. 

Commodity — A commodity is not identical to any other good, article, or product.  Unlike these other products, commodities are not produced for immediate use or consumption by their producer.  Rather, commodities are produced in order to be sold or exchanged, either for money or for other commodities.

Furthermore, commodities are not unique to capitalist society.  Obviously, there existed precapitalist systems of barter, commerce, and exchange.  The point is that throughout most of history the majority of products were not intended to serve as commodities.  They were for the most part produced to serve the most immediate needs of the producer, or alienated without recompense into the possession of one’s feudal lord.  By contrast, capitalism only comes into existence when the majority of products produced by society are commodities.

Currency/Money — The value of money is neither imaginary nor arbitrary.  Money is simply the universal equivalent form of exchange, used as a measurement of the value of goods, or commodities.  This is something of which the Alternative Currency working group should take note.

There are quite real and concrete historical reasons for the development of the money-form of value.  Precious metals came to serve as this medium of exchange because of their practical divisibility, and because of their relative scarcity (and thus also their value, given the difficulty of their location/extraction).  It is true that these metals come to be increasingly substituted by paper money representing their value, and even more abstract forms of credit, but this does nothing to diminish the validity or reality of money as an expression of value.

Capital/Capitalism — Capitalism does not necessarily entail the existence of a free market.  The libertarian notion that has become fashionable in recent years is that only under the economic conditions of laissez-faire, or government non-intervention, can capitalism flourish and exist in a “pure” form.  They cite Bernard Mandeville or a diluted, oversimplified version of Adam Smith as evidence of this proposition.

Some leftish moderates, accepting this facile rightist notion of what capitalism is, naïvely believe that administrative reform, government oversight, more expansive welfare/social programs, and bureaucratic regulations would help counter the volatility and rampant inequality inherent in capitalism.  They believe that the perpetual crisis at the core of capitalism can be “curbed,” “corrected,” or even “controlled” by such Keynesian, neo-Fordist measures.

In reality, however, state-interventionist capitalism is just as capitalist as free market capitalism.  The fundamental principle underlying capitalism in all its different configurations is perhaps elusively straightforward: capital itself.

Corporation — A corporation is not simply any form of capitalist big business.  In fact, in terms of private property, a corporation is actually less tied to the interests of a single individual than non-corporate businesses.  Because the existence of a corporation qua corporation involves an enterprise “going public,” i.e. selling shares of its ownership, it actually reflects (in terms of sheer magnitude) a larger proportion of the public interest than a smaller private enterprise.

Of course, the public character of the corporate enterprise and big agribusiness (the Monsantos of the world) shouldn’t fool us as to their capitalist nature.  A corporation is beholden only to the interest of its shareholders, and not to the public at large.  They have one obligation alone — to turn a profit for those who own a portion of their stock.  And corporations have been known to be exceptionally ruthless in this pursuit.

The only point that I am trying to make by this is to note the irrevocably capitalist character of both big corporations as well as small businesses.  Both operate according to the logic of capital: the supervaluation of value.  In other words, big corporations and small businesses have the same goal at the end of the day.  They seek to turn money into more money.

FURTHER NOTES ON COMMODITIES, CURRENCY (MONEY), CAPITAL, & CORPORATIONS

BIBLIOGRAPHY

Karl Marx, Capital: A Critique of Political Economy, Volume 1 (1867)

Rudolf Hilferding, Finance Capital: A Study of the Latest Phase of Capitalist Development (1910)

Commodity — “first of all, an external object, a thing which through its qualities satisfies human needs of whatever kind.”  Karl Marx, Capital, Volume 1.  Pg. 125.  In this respect, the commodity is a use-value.  A commodity is also something that can be exchanged, and thus possesses an exchange-value.

Later, there is a shift: “When, at the beginning of this chapter, we said in the customary manner that a commodity is both a use-value and an exchange-value, this was, strictly speaking, wrong.  A commodity is a use-value or utility, and a ‘value.’”  Ibid., pg. 152.  Marx explains that the exchange-value only appears for a commodity when it can enter into an exchange relationship with another commodity.

How useful objects become commodities: “Objects of utility become commodities only because they are the products of the labor of private individuals who work independently of each other.  The sum total of the labor of all these private individuals forms the aggregate labor of society.  Since the producers do not come into social contact until they exchange the products of their labor, the specific social characteristics of their private labors appear only within this exchange.  In other words, the labor of the private individual manifests itself as an element of the total labor of society only through the relations which the act of exchange establishes between the products, and, through their mediation, between the producers.”  Ibid., pg. 165.

The price of commodities: “The price of the commodity…is merely the money-name of the quantity of social labor objectified in it.”  Ibid., pg. 202.

In distinction from other goods or products, a commodity is not produced for immediate use or consumption.  Rather, it is produced for the purpose of exchange: “The economic categories already discussed similarly bear a historical imprint.  Definite historical conditions are involved in the existence of the product as a commodity.  In order to become a commodity, the product must cease to be produced as the immediate means of subsistence of the producer himself.  Had we gone further, and inquired under what circumstances all, or even the majority of products take the form of commodities, we should have found that this only happens on the basis of one particular mode of production, the capitalist one.  Such an investigation, however, would have been foreign to the analysis of commodities.  The production and circulation of commodities can still take place even though the great mass of the objects produced are intended for the immediate requirements of their producers, and are not turned into commodities, so that the process of social production is as yet by no means dominated in its length and breadth by exchange-value.  The appearance of products as commodities requires a level of development of the division of labor within society such that the separation of use-value from exchange-value, a separation which first begins with barter, has already been completed.”  Ibid., pg. 273.

The dual aspect of the commodity-form: Use-value vs. Exchange-value

1. use-value — “[t]he usefulness of a thing…conditioned by [its] physical properties.”  The use-value of a commodity “is independent of the amount of labor required to appropriate its useful qualities.”  Ibid., pg. 126.

Utility = “use-value.”

2. exchange-value — “first appears as a quantitative relation, the proportion, in which use-values of one kind exchange for use values of another kind.”  Ibid., pg. 126.

A common element must unite two qualitatively different objects or commodities so that they might be equally exchanged.  This substance that all commodities share is abstract labor-power.

Value = “exchange-value.”

Value is determined by the socially average necessary time for the production of a commodity.  As Marx writes, “[w]hat exclusively determines the magnitude of value is therefore the amount of labor socially necessary, or the labor-time socially necessary for its production.”  Ibid., pg. 129.

The substance of value is labor; the measure of the magnitude of value is labor-time.

Currency/Money — “The commodity which functions as a measure of value and therefore also as the medium of [commodity] circulation, either in its own body or through a representative, is money.”  Ibid., pg. 227.

The logical emergence of money in exchange: “Money necessarily crystallizes out of the process of exchange, in which different products of labor are in fact equated with each other, and thus converted into commodities.  The historical broadening and deepening of the phenomenon of exchange develops the opposition between use-value and value which is latent in the nature of the commodity.  The need to give an external expression to this opposition for the purposes of commercial intercourse produces the drive towards an independent form of value, which finds neither rest nor peace until an independent form has been achieved by the differentiation of commodities into commodities and money.  At the same rate, then, as the transformation of the products of labor into commodities is accomplished, one commodity is transformed into money.”  Ibid., pg. 181.

“The first main function of [money] is to supply commodities with the material for the expression of their values, or to represent their values as magnitudes of the same denomination, qualitatively equal and quantitatively comparable.  It thus acts as a universal measure of value, and only through performing this function does gold, the specific equivalent commodity, become money.”  Ibid., pg. 188.

“As measure of value, and as standard of price, money performs two quite different functions.  It is the measure of value as the social incarnation of human labor; it is the standard of price as a quantity of metal with a fixed weight.  As the measure of value it serves to convert the values of all the manifold commodities into prices, into imaginary quantities of gold; as the standard of price it measures those quantities of gold.  The measure of values measures commodities considered as values; the standard of price measures, on the contrary, quantities of gold by a unit quantity of gold, not the value of one quantity of gold by the weight of another.  For the standard of price, a certain weight of gold must be fixed as the unit of measurement.  In this case, as in all cases where quantities of the same denomination are to be measured, the stability of the measurement is of decisive importance.  Hence the less the unit of measurement (here a quantity of gold) is subject to variation, the better the standard of price fulfills its office.  But gold can serve as a measure of value only because it is itself a product of labor, and therefore potentially variable in value.”  Ibid., pg. 192.

Capital — For the purposes of this presentation, the following symbols will be used as shorthand in the formulae being discussed:

M = Money.

C = Commodity.

Capital is “M → C → M, the transformation of money into commodities, and the re-conversion of commodities into money: buying in order to sell.  Money which describes [this] course in its movement is transformed into capital, becomes capital, and, from the point of view of its function, already is capital.”  Ibid., pg. 248.

More precisely, however, capital expresses itself as M → C → M°.  M° (M “prime”) is the money value that expresses the amount put into the purchase of the commodity plus value over and above that original sum.  The “prime” therefore also represents surplus-value.

“Value therefore now becomes value in process, money in process, and, as such, capital.  It comes out of circulation, enters into it again preserves and multiplies itself within circulation, emerges from it with an increased size, and starts the same cycle again and again.  M → M°, ‘money which begets money,’ such is the description of capital given by its first interpreters, the Mercantilists.”  Ibid., pg. 256.

Species of Capital

1. Usurers’ (or interest-bearing) capital — “[I]n the case of interest-bearing capital, the circulation M → C → M° presents itself in abridged form, in its final result and without any intermediate stage, in a concise style, so to speak, as M → M°, i.e. money which is worth more money, value which is greater than itself.”  Ibid., pgs. 256-257.

“In usurers’ capital, the form M → C → M° is reduced to the unmediated extremes M → M°, money which is exchanged for more money, a form incompatible with the nature of money and therefore inexplicable from the standpoint of commodities.  Hence Aristotle says: ‘[T]he usurer is most rightly hated, because money itself is the source of his gain, and is not used for the purposes for which it was invented.  For [money] originated for the exchange of commodities, but interest makes of money, more money.  Hence its name [τόϰοϛ means ‘interest’ and ‘offspring’].  [T]he offspring resembles the parent.  But interest is money, so that of all modes of making a living, this is the most contrary to nature.’”  Ibid., pg. 266.

2. Merchants’ (or commercial) capital — “The form M → C → M°, buying in order to sell dearer, is at its purest in genuine merchants’ capital. But the whole of this movement takes place within the sphere of circulation.  Since, however, it is impossible, by circulation alone, to explain the transformation of money into capital, and the formation of surplus-value, merchants’ capital appears to be an impossibility, as long as equivalents are exchanged; it appears, therefore, that it can only be derived from the twofold advantage gained, over both the selling and the buying producers, by the merchant who parasitically inserts himself between them.  It is in this sense that [Benjamin] Franklin says ‘war is robbery, commerce is cheating.’  If the valorization of merchants’ capital is not to be explained merely by frauds practiced on the producers of commodities, a long series of intermediate steps would be necessary, which are as yet entirely absent, since here our only assumption is the circulation of commodities and its simple elements.”  Ibid., pgs. 266-267.

“Buying in order to sell, or, more accurately, buying in order to sell dearer, M → C → M°, seems admittedly to be a form peculiar to one kind of capital alone, merchants’ capital.”  Ibid., pg. 256.

3. Industrial capital — “[I]ndustrial capital too is money which has been changed into commodities [or rather, a single commodity — that of labor], and re-converted into more money by the sale of [the] commodities [produced by that labor].”  Ibid., pg. 256.

“In simple circulation, the value, of commodities attained at the most a form independent of their use-values, i.e. the form of money.  But now, in the circulation M → C → M°, value suddenly presents itself as a self-moving substance which passes through a process of its own, and for which commodities and money are both mere forms. But there is more to come: instead of simply representing the relations of commodities, it now enters into a private relationship with itself, as it were.  It differentiates itself as original value from itself as surplus-value, just as God the Father differentiates himself from himself as God the Son, although both are of the same age and form, in fact one single person.”  Ibid., pg. 256.

“In order that a man may be able to sell commodities other than his labor-power, he must of course possess means of production, such as raw materials, instruments of labor, etc.  No boots can be made without leather.  He requires also the means of subsistence.  Nobody — not even a practitioner of Zukunftsmusik [‘music of the future,’ i.e., castles in the air] — can live on the products of the future, or on use-values whose production has not yet been completed; just as on the first day of his appearance on the world’s stage, man must still consume every day, before and while he produces.  If products are produced as commodities, they must be sold after they have been produced, and they can only satisfy the producer’s needs after they have been sold.  The time necessary for sale must be counted as well as the time of production.”  Ibid., pg. 272.

“For the transformation of money into [industrial] capital, therefore, the owner of money must find the free worker available on the commodity-market; and this worker must be free in the double sense that as a free individual he can dispose of his labor-power as his own commodity, and that, on the other hand, he has no other commodity for sale, i.e. he is rid of them, he is free of all the objects needed for the realization [Verwirklichung] of his labor-power.”  Pgs. 272-273.

Concerning the origin of industrial capital: “The expropriation and eviction of a part of the agricultural population not only set free for industrial capital the workers, their means of subsistence and the materials of their labor; it also created the home market.”  Ibid., pg. 910.

4. Finance capital — “The dependence of industry on the banks is therefore a consequence of property relationships.  An ever-increasing part of the capital of industry does not belong to the industrialists who use it.  They are able to dispose over capital only through the banks, which represent the owners.  On the other side, the banks have to invest an ever-increasing part of their capital in industry, and in this way they become to a greater and greater extent industrial capitalists.  I call bank capital, that is, capital in money form which is actually transformed in this way into industrial capital, finance capital.  So far as its owners are concerned, it always retains the money form; it is invested by them in the form of money capital, interest-bearing capital, and can always be withdrawn by them as money capital.  But in reality the greater part of the capital so invested with the banks is transformed into industrial, productive capital (means of production and labor-power) and is invested in the productive process.  An ever-increasing proportion of the capital used in industry is finance capital, capital at the disposition of the banks which is used by the industrialists.”  Rudolf Hilferding, Finance Capital.  Pg. 225.

“Finance capital develops with the development of the joint-stock company and reaches its peak with the monopolization of industry.  Industrial earnings acquire a more secure and regular character, and so the possibilities for investing bank capital in industry are extended.  But the bank disposes of bank capital, and the owners of the majority of the shares in the bank dominate the bank.”  Ibid., pg. 225.

“As capital itself at the highest stage of its development becomes finance capital, so the magnate of capital, the finance capitalist, increasingly concentrates his control over the whole national capital by means of his domination of bank capital.”  Ibid., pg. 225.

“Finance capital has the appearance of money capital, and its form of development is indeed that of money which yields money (M → M°) — the most general and inscrutable form of the movement of capital.  As money capital it is made available to producers in two forms, as loan capital or as fictitious capital.  The intermediaries in this process are the banks, which endeavor at the same time to convert an ever-increasing part of this capital into their own capital, thus endowing finance capital with the form of bank capital.  This bank capital increasingly becomes the mere form — the money form — of actually functioning capital, that is, industrial capital.”  Ibid., pg. 235.

“Tempora mutantur! At the time of the stock exchange inquiry of 1893 speculation was the alpha and omega of capitalism.  Everything is speculation: manufacturing, commerce, hedging operations.  Every capitalist is a speculator, and even the proletarian who considers where be can best sell his labor power is a speculator.  But in the cartel inquiry, the sanctity of speculation is forgotten.  It is now the unmitigated evil from which crises, overproduction, and, in short, all the defects of capitalist society flow.  Eliminate speculation is now the slogan.  In place of the ideal of speculation we now have speculation about an ideal condition of ‘stable prices’ and of the demise of speculation.  The stock exchange and commerce are now speculative, reprehensible activities, which must be cast aside in favor of industrial monopoly.  Industrial profit incorporates commercial profit, is itself capitalized as promoter’s profit, and becomes the booty of the trinity which has attained the highest form of capital as finance capital.  For industrial capital is God the Father, who sent forth commercial and bank capital as God the Son, and money capital is the Holy Ghost.  They are three persons united in one, in finance capital.”  Ibid., pg. 220.

Corporation — “The corporation is an association of capitalists.  It is formed by each capitalist contributing his share of capital, and the extent of his participation, his voting rights, and the degree of his influence, are determined by the amount of capital he contributes.  The capitalist is a capitalist only in so far as he owns capital, and he is differentiated from other capitalists only in a quantitative way.  Hence the control of the enterprise as a whole is in the hands of those who own a majority of the shares.  This also means that a corporation can be controlled by those who own half the capital, whereas in an individually owned enterprise it is necessary to own the whole capital.  This doubles the power of the large capitalists.  Disregarding here the role of credit, a capitalist who decides to turn his enterprise into a joint-stock company needs only half his capital in order to retain complete control.  The other half becomes disposable and can be withdrawn from the enterprise.  It is true, of course, that he would then lose the dividends on this half.  Nevertheless, the control of outside capital is extremely important, and his domination of the enterprise is, aside from everything else, a crucial means of influencing the sale and purchase of shares on the stock exchange.”  Rudolf Hilferding, Finance Capital.  Pg. 118.

“At its foundation the corporation does not have recourse to the relatively small stratum of working capitalists who must combine ownership with the entrepreneurial function.  From the beginning, and throughout its life, the corporation is quite independent of these personal qualities.  Death, inheritance, etc., among its owners, have absolutely no effect upon it.  But this is not the decisive difference between the corporation and the individually owned enterprise, since the latter can also replace the personal qualities of its owners, at a certain stage of development, by those of paid employees.  Equally unimportant in practice is another distinction made in the literature on the subject: namely, that on one side there is the individual entrepreneur, who is an independent and responsible agent with a stake in his enterprise, and on the other side a crowd of uninformed, powerless entrepreneurs (shareholders) who have only a minor interest in their enterprise, and understand nothing about its management.  In fact the corporations — especially the most important, profitable, and pioneering ones — are governed by an oligarchy, or by a single big capitalist (or a bank) who are, in reality, vitally interested in their operations and quite independent of the mass of small shareholders.  Furthermore, the managers who are at the top of the industrial bureaucracy have a stake in the enterprise, not only because of the bonuses they earn, but, still more important, because of their generally substantial shareholdings.”  Ibid., pgs. 122-123.

“The objective difference between the two kinds of enterprise is much more important.  Recourse to the money market is a recourse to all those who have money (including the credit at their disposal).  The corporation is independent of the size of individual amounts of capital, which must first be brought together in a single hand if they are to function as the industrial capital of a privately owned enterprise.  Not only does it broaden the circle of people involved (anyone who has money can be a money-capitalist), but every sum of money above a certain minimum (which need only amount to a few schillings) is capable of being combined with other sums in a joint-stock company and used as industrial capital.  It is therefore much easier to establish, or to expand, a corporation than a privately owned enterprise.”  Ibid., pg. 122.