Thursday, 29 October 2015

Capital III, Chapter 16 - Part 1

Commercial Capital

Merchant's, or trading, capital breaks up into two forms or sub-divisions, namely, commercial capital and money-dealing capital, which we shall now define more closely, in so far as this is necessary for our analysis of capital in its basic structure. This is all the more necessary, because modern political economy, even in the persons of its best exponents, throws trading capital and industrial capital indiscriminately together and, in effect, wholly overlooks the characteristic peculiarities of the former. ” (p 267)

In Capital II, it was seen how industrial capital is divided into three distinct forms of capital-value. Money-capital, productive-capital, and commodity-capital. The circuit of industrial capital is the fusion of the separate circuits of these three forms of capital value. Industrial capital is simultaneously in each of these three forms.

For any industrial capital, a portion is constantly in the form of money-capital, being metamorphosed into productive-capital, by the purchase of means of production and labour-power; a portion is in the form of productive-capital being metamorphosed by the production process into commodity-capital; a final portion is in the form of commodity-capital being metamorphosed into money-capital by the sale of commodities in the market.

It is only the productive-capital that produces surplus value, in the production process, but without the sale of the commodities that comprise the commodity-capital, that surplus value is not realised, and without the money-capital there is no purchase of productive-capital to produce surplus value.

The commodity-capital and the money-capital represent capital in circulation, but even a productive-capital must devote a portion of its capital to the circulation process, even though it adds nothing to the value of its product, and creates no surplus value.

A manufacturing firm will need to employ workers who deal with the metamorphosis of the money-capital into productive-capital. That is they will require buyers. It will also need workers who deal with the metamorphosis of the commodity-capital into money-capital. That is they will require sales and marketing staff.

What Marx demonstrates, in this chapter, is how these specific functions become increasingly specialised, as capital expands, and how these functions thereby become separated off into specific individual capitals that perform these functions.

“Inasmuch as this function of capital in the process of circulation is at all set apart as a special function of a special capital, as a function established by virtue of the division of labour to a special group of capitalists, commodity-capital becomes commercial capital.” (p 267)

The functions of this commercial capital should not be confused with the function of the transport and communications industry, as was demonstrated in Capital II. Transport and communications are themselves productive activities, which create value and surplus value. This function, which is inevitably intertwined with the process of selling and buying, because commodities have to be moved from where they are produced to where they are sold, has to be separated from the pure costs of selling itself.

“Sometimes they are, indeed, practically bound up with these distinct, specific functions, although with the development of the social division of labour the function of merchant's capital evolves in a pure form, i.e., divorced from those real functions, and independent of them.” (p 268)

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