Merchant Capital
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| Google is an example of a firm that provides a service, but is productive-capital. |
The breakdown, into 80% Services and 20% Industry, gives a false impression of the continued importance of industrial capital. To be precise, the term industrial capital refers to the complete cycle of capital, M – C … P … C' – M'. This, as Marx sets out in Capital II, is really the unity of three different cycles of capital – M – M', C' – C', and P...P.
As capitalism becomes more developed, these three different cycles take on the material form of three different types of capital, whose human representation is three different class fractions. They are money-capitalists, productive-capitalists, and merchant capitalists.
In speaking of industrial capital today, what is really meant is productive-capital as opposed to money-capital or merchant-capital. On the basis of that definition, large parts of “Services”, therefore, are themselves part of “Industrial Capital”. Any business involved in the production of goods and services, as opposed to simply providing or handling money-capital, or selling already produced goods and services, is industrial or productive capital.
The reason these material conditions become manifest, in the realm of ideas, in complex forms, then becomes clear. On the one hand, huge retailers, like Wal-Mart, and the small, family run shop are both forms of merchant capital. In fact, Wal-Mart started out as such a business. The fact it is still owned and controlled by the Walton family is no doubt one reason why many of the reactionary, small business mentality practices continue in the firm today.
On the other hand, most of the huge modern retailers have much in common with big industrial capital. They employ vast amounts of constant capital, relative to variable capital. Although merchant capital only shares in the surplus value produced by productive-capital, merchant capital extracts that surplus value from the labour-power it employs in exactly the same ways that productive-capital does.
So, both a small productive-capitalist and merchant capitalist will lean heavily on the extraction of absolute surplus value. They will be cheapskate employers that try to pay as little wages as possible and provide the worst conditions they are able to get away with. But, large employers, be they productive or merchant capitalists, who employ large amounts of constant relative to variable capital, will be more concerned to ensure that this constant capital is continuously and intensively used than trying to squeeze additional pennies from its workers. They will have an incentive in trying to ensure that their workers work continuously and productively. They will want to avoid strikes or high rates of staff turnover, they will want to avoid discontent which leads to the above, as well as leads to workers being less productive, producing poor quality etc. It is much easier for these large employers in other words to extract relative as opposed to absolute surplus value, and for all the reasons Engels set out, a bourgeois social democratic ideology flows from those material conditions.
Huge merchant capitalists, for similar reasons, may share other interests with big industrial capital, that they do not share with their smaller brethren. Under colonialism, merchant capital was the advanced guard of the ruling feudal aristocracy. It had its own armies that worked in tandem with the feudal state to establish foreign domains, and made profits through buying low within them, and selling high back to them, supported by that military power. But, modern large merchant capital operates in these foreign markets in much the same way that multinational industrial capital does. Modern imperialism means that every capitalist state now defends the interest of all capital operating within its domain, and so the overhead costs of colonialism are removed. Wal-Mart operates in the UK on the same basis it operates in the US or India.
And yet, as merchant capital it continues to have materially different interests to those of industrial capital, for the reasons previously described.
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