Bourgeoisie

BIBLIOGRAPHY

In classical Marxian theory, bourgeoisie refers to the ruling class of capitalist society. Superseding the feudal aristocracy, its origins have been traced to a relatively early stage in capitalist development, when it was defined by ownership of the means of production. Since the 1800s the functions of management and ownership have become separated, however. As this has occurred, the explanatory value of the term bourgeoisie has become attenuated, particularly in discussions of advanced or late capitalism in the era of finance.

In French, bourgeoisie originally referred to the society of free men in towns, implying a citizen subject to civil law. The German political philosopher Karl Marx (1818–1882) and his collaborator, the German socialist Friedrich (also spelled Frederick) Engels (1820–1895), understood the bourgeoisie to have emerged from the class of “chartered burghers” in medieval towns, and in their works they trace the development of this class through several stages, from relative oppression under the feudal nobility, to militarized self-governing associations, to independent republics and taxable estates. They also linked the rise of this class to the simplification of class antagonism into a fundamentally binary opposition between the bourgeoisie and the proletariat. Marx never described the actual composition of the bourgeoisie as completely as he described the proletariat, and often the term appears to be interchangeable with capitalist.

The factors facilitating the rise of the bourgeoisie were both economic and geopolitical, and these two were related. In Marx’s analysis, the drive to accumulation inherent in capitalism must be understood in terms of two kinds of capital, including constant capital (the value of the means of production) and variable capital (the value of labor power). Any expansion in total capital requires a growth in variable capital, which is generally achieved through the enhancement of technological means enabling the increased productivity of labor. A contradiction lies at the heart of this relation, however, for the variable portion of the capital grows more slowly than does the constant portion. This is overcome, says Marx, by increasing the scale of production; the larger the enterprise, the more capacity for accumulation it will have.

The process is, nonetheless, not linear. To begin with, the drive to accumulation generates competition among different capitalists. The result is a complex dialectic between accumulation and concentration, as well as centralization. In this environment, large-scale capital is not only advantaged in relation to smaller capital, because it can control more labor, but it grows at the expense of smaller capital. Such centralization is made possible by the credit system. Moreover, as the economist Rudolf Hilferding has argued, it is the merging of banking and industrial capital that permits and actualizes this centralizating dynamic—though not without countervailing pressures.

Through the credit system, the idle money that accumulates in the course of production is gathered together and made available for investment in production. Time is of the essence here, for the period during which money is not invested in production is, from the perspective of capital, lost. What the banks do, then, is permit enterprises to keep their own money in production, while still being able to draw on it for enhancement or expansion when opportunity arises. When assisted by banking institutions, the corporations no longer have to keep their money in reserve for such opportunities. There is, then, a phantomatic extension of the corporation through credit.

At the same time, other institutions, such as the stock market, permit the creation of joint-stock companies in which collectivities rather than individuals come to function as owners. This “special institution,” as Hilferding termed it, provides a market for “titles to interest, or fictitious capital ” (1981, pp. 107–180). Money is transformed into productive capital through the stock market because the shareholders only expect a return on the yield of the company, and their sale of title does not lead to a withdrawal of money from the corporation’s productive machinery.

In this sense, the shareholder is not an owner of the means of production. He is, rather, representative of a new kind of capitalist, a money capitalist, defined by Hilferding as one liberated from the status of industrial entrepreneur. Like the manager, his actions serve the interests of the company and hence of corporate capital, but only in an extremely mediated fashion. Accordingly, many thinkers, most notably Nicos Poulantzas, argue for a reconceptualization of the bourgeoisie as a class defined not by ownership of the means of production but by the function of economic control. Others have disputed this and have preferred to see managers as special kinds of wage laborers.

With the rise of the stock market, and speculation more generally, the creation of value appears to become increasingly separated from the question of production. Initially, this market sought to attract large-scale capital, accumulated by members of a relatively conventional bourgeoisie. Other institutions, such as mutual funds, have extended this process however and, consequently, helped to disseminate the capitalist ideal even among those who are merely wage laborers. They represent a profound cultural transformation and may perhaps help explain the subversion of class consciousness in social milieus defined by financialization. Nonetheless, it is important to understand that industrial capital continues to play a crucial rule even in financialized contexts, and the vast majority of the world’s labor remains engaged within it, even though a disproportionate amount of value is produced in and by financial capital.

The forces that would ultimately lead to the political and social transformation of capitalism were, Hilferding thought, internal to capitalism itself. Other, liberal theorists agreed, though for different reasons. Adolf Berle, for example, saw the concentration and centralization of capital in the huge corporations of the United States in the mid-twentieth century as a direct product of joint stock organization. But while relying upon state regulation, which, for example, provides tax incentives for philanthropic giving, Berle argued that the new corporations themselves assumed a “quasi-political” role. He argued further that the greatest incentive to corporate growth and rationalization is the threat of competition from state enterprises. Corporate investment in local infrastructural development and education as well as international diplomacy carried out by corporate representatives constitutes, for Berle, the hallmark of a specifically American form of corporatist capitalism whose defining attribute is its antipathy to statism.

Berle’s conception of what might be termed, in an idiom coined by the French philosopher Michel Foucault, corporate “governmentality” may be contrasted to Marx’s original conception of the relationship between bourgeois political and economic form. Marx had argued that the bourgeoisie assumed economic predominance partly through its development of a political form capable of representing its interests, namely bourgeois democracy. Although a national entity, the bourgeois democratic state was nonetheless made possible only by the reordering of local economies in colonial territories—to produce markets for European goods and to permit the extraction of natural resources for processing in metropolitan centers or, later, to serve as export processing zones. Hilferding went so far as to argue that the inhibiting influences of cartelization and protectionism within European states could only be overcome by outward expansion, and hence that the development of European capital led inevitably to imperialism, a thesis shared in different ways by both the Russian Communist thinkers Nikolay Bukharin (1888–1938) and Vladimir Lenin (1870–1924).

Toward the end of the twentieth century, economic theorists began to observe a rupture in the relationship between nation-states and corporate capital, and a super-session of the bourgeois nation-state by regional trade bodies and economic consortia (such as the North American Free Trade Agreement, the European Union, and the G8) that, while backed by the governmental authority of nation-states, attempt to ensure that domestic protectionism, which might have been deployed by national capital, does not inhibit the expansion of capital, per se. As Hilferding anticipated, financial institutions have assumed an increasingly dominant role in such contexts, and access to credit has become a significant index of economic power for both corporations and individual persons. The development of a sphere of value-creation relatively unmoored from production, through currency trading, real estate speculation, and derivatives trading, suggests that the old bourgeoisie has not only been liberated from the function of industrial entrepreneur but that the money capitalist has become the new bearer of capital’s own self-interest.

SEE ALSO Capitalism; European Union; G8 Countries; Globalization, Social and Economic Aspects of; Marx, Karl; Marxism; North American Free Trade Agreement; Poulantzas, Nicos

BIBLIOGRAPHY

Berle, Adolf. 1932. The Modern Corporation and Private Property. New York: Commerce Clearing House.

Berle, Adolf. 1954. The Twentieth-Century Capitalist Revolution. New York: Harcourt Brace.

Hilferding, Rudolf. 1981. Finance Capital: A Study of the Latest Phase of Capitalist Development. Trans. Morris Watnick and Sam Gordon. Boston: Routledge and Kegan Paul.

Mandel, Ernest. 1978. Late Capitalism. Trans. Joris de Bres. New York: Verso.

Marx, Karl. 1978. The Class Struggles in France, 1848–1850. In Karl Marx, Frederick Engels: Collected Works, Vol. 10, 45–145. New York: International Publishers. (Orig. pub. 1850).

Marx, Karl. 1992. Capital. Vols. 1 and 3. Ed. and intro. C. J. Arthur. London: Lawrence and Wishart. (Orig. pub. 1867, 1885, 1894).

Marx, Karl, and Frederick Engels. 1998. The Communist Manifesto. New York: Verso. (Orig. pub. 1848).

Poulantzas, Nicos. 1978. Classes in Contemporary Capitalism. Trans. David Fernbach. New York: Verso.

Rosalind C. Morris