Wednesday, 25 November 2015

Capital III, Chapter 18 - Part 9

As capitalism develops, this means that the turnover of merchant capital increases, so the same quantity of capital turns over a larger quantity of commodities. The proportion of merchant capital to industrial capital, therefore, declines, which acts to increase the general rate of profit.

Yet, at the same time, capitalist development means that an increasing portion of economic activity passes through the market as direct production declines. Further capitalist development means that an increasing volume of commodities are sent into the market to be sold, and more and more markets are opened up across the globe so that the merchant capital has a growing mass of commodities to turn over.

The consequence is that although merchant capital shrinks as a proportion of the total social capital, its absolute size increases compared to its position in the past, where, by contrast, it was smaller but occupied a proportionately larger role.

Another consequence of the fact that a greater proportion of products take the form of commodities, is that in addition to the expansion of merchant capital, there is an increase of all capital employed in the process of circulation. So, for example, all transport industries expand. Marx comments,

“However, and this is an aspect which belongs to the discussion of "competition among capitals": idle or only half-functioning merchant's capital grows with the progress of the capitalist mode of production, with the ease of entering retail trade, with speculation, and the redundance of released capital.” (p 311)

But, he does not elaborate further. Presumably, he is referring to the situation where released capital, in the form of available credit, is picked up often by unemployed workers to open shops for their self-employment, or to engage in various forms of market trading and speculation.

Back To Part 8

Forward To Part 10

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