Now we have already seen that this severance of the personal relation between employer and employed is a necessary result of the establishment of the large factory as the industrial unit, and of the ever-growing complexity of modern commerce.
It is not merely that the widening gap of social position between employer and employed, and the increased number of the latter, make the previous close relation impossible.

Quite as important is the fact that the real employer in modern industry is growing more "impersonal." What we mean is this.

The nominal employer or manager is not the real employer.

The real employer of labour is capital, and it is to the owners of the capital in any business that we must chiefly look for the exercise of such responsibility as rightly subsists between employer and employed.

Now, while it is calculated that one-eighth of the business of England is in the hands of joint-stock companies, constituting far more than one-eighth of the large businesses, in the great majority of other cases, where business is conducted on a large scale, the head of the business is to a great extent a mere manager of other people's capital.
Thus while the manager's sense of personal responsibility is weakened by the number of "hands" whom he employs, his freedom of action is likewise crippled by his obligation to subserve the interests of a body of capitalists who are in ignorance of the very names and number of the human beings whose destiny they are controlling.