Sunday, 29 November 2015

Capital III, Chapter 19 - Part 1

Money-Dealing Capital

Money-dealing capital, dealt with in this chapter, has to be distinguished from interest-bearing capital, dealt with later. Money-dealing capital here is a form of merchant capital. Merchant capital obtains its share of the total surplus value, because of the function it performs in selling commodities on behalf of productive-capital. It is the commodity-capital of industrial capital that has separated off into its own independent existence. But, similarly, industrial capital must always hold a certain quantity of money-capital. It requires money for circulation, and for payments; it must hold money hoards, which are the money equivalent of the value of wear and tear of fixed capital, waiting to be reproduced; it must hold money hoards which are the equivalent of realised surplus value that is not yet sufficient to be reinvested; it must hold money reserves to cover payment of wages during the turnover period and so on.

As well as the requirement to hold this money-capital, it must employ bookkeepers, cashiers, and so on to keep track of the various payments and receipts, as well as to actually make the payments and take the receipts. All of these activities are necessary functions, are costs, which, like the selling of commodities, add no new value, but which are required for the value of commodities to be realised. As with the selling of commodities, the more capital can reduce these costs, therefore, the greater the proportion of the produced surplus value that can be realised as profit.

Money-dealing capital is then the equivalent, at the level of the social capital, of the role of the bookkeeper or cashier within the firm. Its profit derives not from the lending of money, but from the provision of these services. An example, would be something like Paypal, which makes its profits solely on the basis of providing a money transmission service, or various Bureaux de Changes, or FOREX companies who make their profits from charges levied for changing money from one currency to another.

As Marx puts it,

“A portion of industrial capital, and, more precisely, also of commercial capital, not only obtains all the time in the form of money, as money-capital in general, but as money-capital engaged precisely in these technical functions. A definite part of the total capital dissociates itself from the rest and stands apart in the form of money-capital, whose capitalist function consists exclusively in performing these operations for the entire class of industrial and commercial capitalists. As in the case of commercial capital, a portion of industrial capital engaged in the circulation process in the form of money-capital separates from the rest and performs these operations of the reproduction process for all the other capital. The movements of this money-capital are, therefore, once more merely movements of an individualised part of industrial capital engaged in the reproduction process.” (p 315)

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