Capital III, Chapter 17 - Part 7

“But, on the other hand, the profit realised by the merchant on a small amount of advanced capital may be no larger, or may even be smaller, than the wages of one of the better-paid skilled wage-workers. In fact, he brushes shoulders with many direct commercial agents of the productive capitalist, such as buyers, sellers, travellers, who enjoy the same or a higher income either in the form of wages, or in the form of a share in the profit (percentages, bonuses) made from each sale.” (p 290)

In both cases, what each really receive, Marx says, is simply a share of the commercial profit, whether it appears as the profit of the merchant or the wage of the employed salesman.

“This follows from his labour not being labour which produces value.” (p 290)

Its not clear what Marx is trying to say here. On the one hand, it appears he is saying that these payments are not really wages, but only a share in this commercial profit. But, that would really be to contradict his analysis of the wages of commercial workers. The logical conclusion would seem to be that this labour, performed by the small commercial capitalist, which assumes the form of a 'profit', in fact receives a wage which wipes out any such profit, even though it might be a lower wage than many skilled workers themselves received.

The basis for the separation of the commodity-capital of industrial capital into an independent merchant capital, resides in the benefits for capital of the division of labour. As seen in Capital II, industrial capital benefits greatly from a shortening of the turnover period, both because it raises the annual rate of profit, and because it brings about a release of capital, facilitating increased accumulation. Merchant capital is a powerful means of reducing the turnover period for capital.

“The lengthening of the act of circulation represents for the industrial capitalist 1) a personal loss of time, since it prevents him from performing in person his function as manager of the productive process; 2) a longer stay of his product in money- or commodity-form, in the circulation process, hence in a process where it does not expand value and where the direct production process is interrupted. If this process is not to be interrupted, production must either be curtailed, or more money-capital must be advanced to maintain the process of production on the same scale. This means that each time either a smaller profit is made on the capital hitherto invested, or that additional money-capital must be advanced to make the previous profit.” (p 290-1)

The reason the industrial capitalist is prepared to hand over this portion of profit to the merchant capitalist is precisely because the costs of selling themselves, including the costs of having their capital tied up in the circulation process, would suffer an even greater reduction in their realised profit.

“If in the above example, 720c + 180v + 180s, assisted by a merchant's capital of 100, produces a profit of 162, or 18%, for the industrial capitalist, hence implying a deduction of 18, then, but for this independent merchant's capital, the additional capital required would probably be 200, and we should have a total advance by the industrial capitalist of 1,100 instead of 900, which, based upon a surplus-value of 180, would yield a rate of profit of only 16 4/11%.” (p 291)

All of the capital, constant and variable, that an industrial capitalist sets aside for these purposes, produces no surplus value, and as a result reduces the rate of profit. From the perspective of the total social capital, this remains true, but, because the merchant capitalist specialises in these functions, the total amount of capital they require is smaller, so the rate of profit, for the total social capital, is higher.

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