Capital III, Chapter 16 - Part 9

The more credit is developed, the smaller relatively the money-capital required to effect this circulation, because commodities can be bought by merchants, and sold before the payment date, thereby removing the need for additional money-capital in the intervening period.

Just as no value or surplus value was created in the circulation process, when conducted by the producer, so this is not changed when it becomes the preserve of the merchant capitalist.

Pietro Verri

Marx quotes the arguments of a number of economists to demonstrate this error. Ramsay, Verri and Say confused the role of merchant's capital with transport to explain merchant's profit, and S.P. Newman wrote,

“"In the existing economical arrangements of society, the very act, which is performed by the merchant, of standing between the producer and the consumer, advancing to the former capital and receiving products in return, and then handing over these products to the latter, receiving back capital in return, is a transaction which both facilitates the economical processes of the community, and adds value to the products in relation to which it is performed" (p. 174).” (Note 38, p 278)

Marx points out that the use value of a commodity is undoubtedly greater in the hands of the consumer than of the producer, because its only function is to meet the needs of consumption.

“But one does not pay twice for a commodity — first for its exchange-value, and then for its use-value. By paying for its exchange-value, I appropriate its use-value. And its exchange-value is not in the least augmented by transferring the commodity from the producer or middleman to the consumer.” (ibid)

Merchant's capital only effects the more efficient circulation of commodities. It thereby facilitates the process of realising the value of those commodities, and the surplus value they contain. It does not create any additional value or surplus value. The productive capitalist in buying the elements of productive capital does not realise any surplus value either, therefore, by that act. They only provide the means by which surplus value can be created in the productive process.

“He merely initiates the production of surplus-value through exchanging his money for means of production and labour-power. But so far as these metamorphoses require circulation time — time during which capital does not produce at all, least of all surplus-value — it restricts the creation of values, and the surplus-value expresses itself through the rate of profit in inverse ratio to the duration of the circulation period. Merchant's capital, therefore, does not create either value or surplus-value, at least not directly. In so far as it contributes to shortening the time of circulation, it may help indirectly to increase the surplus-value produced by the industrial capitalists. In so far as it helps to expand the market and effects the division of labour between capitals, hence enabling capital to operate on a larger scale, its function promotes the productivity of industrial capital, and its accumulation. In so far as it shortens circulation time, it raises the ratio of surplus-value to advanced capital, hence the rate of profit. And to the extent that it confines a smaller portion of capital to the sphere of circulation in the form of money-capital, it increases that portion of capital which is engaged directly in production.” (p 279-80)

Back To Part 8

Forward To Chapter 17

Back To Volume III Index