Commodity-Capital

Commodity-Capital is the form assumed by capital value at the completion of the production process. The capital-value of the commodity-capital thereby comprises the value of the productive-capital plus the surplus value created in the production process.

Commodity-capital is necessarily comprised of commodities, and as Marx describes in Capital II, what is sold is not commodity-capital, but the commodities that comprise it. At the end of the production process we have P...C', which signifies that the commodity-capital includes the produced surplus value. But, when these commodities are sold the circuit is simply C – M, because these commodities exchange at their value, for an equal amount of value represented in a quantity of money. The value of the commodities sold is equal to the labour-time expended on their production, and this labour-time includes the unpaid labour-time, which is the source of the surplus value, as well as the paid labour-time, which is equal to the capital value of the variable capital.

In order to realise this value, the capitalist has to sell these commodities, and this process involves a cost, which does not add any additional value to the commodities. As Marx points out, no buyer will pay more for any commodity simply because the seller takes longer to sell it than is required by some other seller, or is required for some other commodity. That is why in the early stages of commodity-exchange, sellers used to take their commodities to market on a Sunday, when they would not have been working anyway, and so when they lost no production time. The cost of selling, however, involves the seller in laying out additional capital, which means both that this capital cannot be used for productive purposes, and also that the rate of profit is reduced. There is an incentive to reduce this expenditure as much as possible, therefore.

This gives rise to the development of Merchant Capital as a specific function under Industrial Capitalism.