Saturday, 14 November 2015

Capital III, Chapter 17 - Part 8

Taking into consideration this additional capital that merchant capital must lay out to cover these additional expenses, means we must modify the calculation of the average rate of profit further. Now, its not just the industrial capital plus the merchant capital required to purchase the commodity-capital that must form the basis, but that plus the capital required to cover these additional costs.

“If in our above example an additional capital of 50 is advanced besides the merchant's capital of 100 to cover the costs in question, then the total surplus-value of 180 is distributed with respect to a productive capital of 900 plus a merchant's capital of 150, together = 1,050. The average rate of profit, therefore, sinks to 17 1/7% The industrial capitalist sells his commodities to the merchant at 900 + 154 2/7 = 1,0542 1/7, and the merchant sells them at 1,130 (1,080 + 50 for costs which he must recover).” (p 292)

But, in order to obtain all of these economies, the merchant, like the industrial capitalist must operate on a large scale. This larger scale is impossible without employing large numbers of wage workers. The mass of capital, therefore, must increase absolutely in order for the amount of realised profit to rise relatively.

“It is only through its function of realising values that merchant's capital acts as capital in the process of reproduction, and hence draws on the surplus-value produced by the total capital. The mass of the individual merchant's profits depends on the mass of capital that he can apply in this process, and he can apply so much more of it in buying and selling, the more the unpaid labour of his clerks. The very function, by virtue of which the merchant's money becomes capital, is largely done through his employees. The unpaid labour of these clerks, while it does not create surplus-value, enables him to appropriate surplus-value, which, in effect, amounts to the same thing with respect to his capital. It is, therefore, a source of profit for him. Otherwise commerce could never be conducted on a large scale, capitalistically.” (p 293-4)

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