Capital II, Chapter 4 - Part 6

Where industrial capital has become predominant, the majority of means of production are themselves commodities produced by some other industrial capital. So, M – C, the purchase of means of production, for some other capital, appears as C' — M', the transformation of their commodity capital into money-capital. But, this is not necessarily the case. Industrial capital can purchase its means of production from diverse sources covering a range of modes of production. For example, cotton was bought from the southern slave-owning states of the US, sugar bought from slave production in the Caribbean, whilst various agricultural products were bought from peasant producers in Ireland and Europe.

“No matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots). of communes (Dutch East Indies), of state enterprise (such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc. — as commodities and money they come face to face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue; hence they enter in both branches of circulation of commodity-capital. The character of the process of production from which they originate is immaterial. They function as commodities in the market, and as commodities they enter into the circuit of industrial capital as well as into the circulation of the surplus-value incorporated in it. It is therefore the universal character of the origin of the commodities, the existence of the market as world-market, which distinguishes the process of circulation of industrial capital. What is true of the commodities of others is also true of the money of others. Just as commodity-capital faces money only as commodities, so this money functions vis-à-vis commodity-capital only as money. Money here performs the functions of world-money.” (p 113)

Marx then elaborates a principle important for understanding the role of Imperialism as a “Pioneer of Capitalism” to use Bill Warren's term.

“First: as soon as act M — MP is completed, the commodities (MP) cease to be such and become one of the modes of existence of industrial capital in its functional form of P, productive capital. Thereby however their origin is obliterated. They exist henceforth only as forms of existence of industrial capital, are embodied in it. However it still remains true that to replace them they must be reproduced, and to this extent the capitalist mode of production is conditional on modes of production lying outside of its own stage of development. But it is the tendency of the capitalist mode of production to transform all production as much as possible into commodity production. The mainspring by which this is accomplished is precisely the involvement of all production into the capitalist circulation process. And developed commodity production itself is capitalist commodity production. The intervention of industrial capital promotes this transformation everywhere, but with it also the transformation of all direct producers into wage-labourers.” (p 113-4)

The suppliers of these means of production themselves are confronted by their return in their metamorphosed form of commodities produced by industrial capital. They do so not directly from the industrial capitalist but via the intermediary of Merchant Capital.

“And merchant’s capital, by its very nature comprises commodities of all modes of production.” (p 114)

The industrial capitalist is always in a sense also a merchant because they sell to merchants and because they sell directly to other industrial capitalists. But, the majority of consumers only buy through the intermediary of Merchant Capital.

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