Social Capital

Social Capital 

the sum total of interrelated individual capitals. Like individual capital, social capital expresses the production relation between labor and capital, but unlike individual capital, social capital also expresses the production relation between the entire class of proletarians and the entire bourgeois class. The movement of social capital is the result of the turnover of the various individual capitals and takes place both in the sphere of production and the sphere of distribution.

Social capital exists in three forms: money capital, productive capital, and commodity capital. The interrelatedness of the turnover of the various individual capitals manifests itself on the markets for commodities, labor power, and loan capital. Social capital in commodity form constitutes the aggregate social product, the realization of which requires proportionality among the distinct elements of social production; above all, there must be a balance between subdivision I (means of production) and subdivision II (consumer goods).

The realization of commodity capital on the market, a process that presupposes exchange between individual capitals, is a function of commercial capital. New groups of proletarians are brought into the process of capitalist production through the labor market. The redistribution of labor power within a branch of the economy or among the different branches also takes place through the labor market. The capital market mediates the transfer of temporarily unutilized monetary resources from one enterprise to another or from one sector to another, thus providing the mechanism for capital investment. The capitalist credit system uses the savings of all strata of the population for capital formation. Because of the existence of credit relations, social capital partly takes the form of fictitious capital, that is, stocks and bonds.

The goal of the movement of social capital is the appropriation of surplus value, which, in the process of distribution and redistribution of the national income, takes the form of entrepreneurial and commercial profits, interest on loans, and land rents. The reallocation of surplus value among capitalists within one branch of industry, or different branches, or among industrial, commercial, and financial capitalists and landowners gives rise to a number of contradictions within the exploiting class. The growth of social capital is accompanied by an increase in the socialization of production. This tendency sharpens the fundamental contradiction of capitalism and prepares the way for a new socioeconomic formation. The contradiction between the social character of production and the private capitalist form of appropriation gives a cyclical character to the reproduction of social capital and inevitably brings on economic crises of overproduction.

Under imperialism the movement of social capital becomes more complex. This movement occurs in two related economic sectors: the monopolized and the nonmonopolized sectors. In the monopolized sector the goal of the movement of capital is to maximize monopoly profits. Monopoly banking and monopoly industrial capital merge, giving rise to finance capital. Seeking to achieve economic and political domination, the financial oligarchy comes into conflict not only with the proletariat but with the petite and middle bourgeoisie, that is, with the majority of the nation. The processes occurring under imperialism, within the framework of the world capitalist economic system, further extend and strengthen the front in the struggle against the financial oligarchy.

In the epoch of the general crisis of capitalism the movement of social capital occurs under conditions in which all the contradictions of bourgeois society become intensified. Among the tendencies that now become typical of the capitalist economy are underutilization of productive capacity, high unemployment levels, and retardation of technological progress. Under state-monopoly capitalism, increased regulation of the movement of social capital by the state and the monopolies is accompanied by the outbreak of severe new conflicts. Attempts at regulation therefore fail to eliminate the contradictions of capitalism as a social system.

REFERENCES

Marx, K., and F. Engels. Soch., 2nd ed., vol. 24, vol. 25, part 2. (See index.)
Politicheskaia ekonomiia sovremennogo monopolisticheskogo kapitalizma, 2nd ed., vol. 1. Moscow, 1975. Chapters 12–14.

V. M. RULEV