Private Capital

in capitalist society the portion of social capital in monetary, production, or commodity form privately owned by the individual capitalist and used by him to extract profit.

Private capital is the basic unit of the private capitalist economic system. Although the movement of social capital is the end result of the circulation of private capital and the struggles of individual capitalists who are striving for maximum profit, the functional limits of private capital are determined by objective ratios of social reproduction. The movement of private capital, as of all social capital, occurs spontaneously through the continuously disproportional state and anarchy of capitalist production; enrichment of certain capitalists is attended by the financial ruin of others.

The actual forms of private capital depend on their role in the historically determined structure of social production. Private capital may be used in industry, commerce, or finance, correspondingly bringing the owner surplus value in the form of industrial or commercial profit or loan interest. During the age of premonopolistic capitalism the individual capitalist who combined the functions of ownership and capital management was the embodiment of private capital. Under contemporary conditions private capital is embodied in capitalist firms with complex organizational structures, within which ownership is usually separated from management.