Thursday, 10 December 2015

Capital III, Chapter 20 - Part 2

The merchant capitalist, like the money-capitalist, can only increase the value of their capital, withdraw more from circulation than they throw into it, because they engage in unequal exchange. The additional value they withdraw arises, not because their own capital has self-expanded, has produced additional value, but has merely been able, in the case of merchant-capital, to be able to buy commodities below their value, and/or sell them above their value. For such a situation to continue, the actual expansion of value must occur elsewhere, either in the form of a surplus value, produced by a capitalist producer, or a surplus product produced by a peasant or slave producer.

“Since we have already seen that money-dealing and the capital advanced for it require nothing more for their development than the existence of wholesale commerce, and further of commercial capital, it is only the latter which we must occupy ourselves with here.

Since merchant's capital is penned in the sphere of circulation, and since its function consists exclusively of promoting the exchange of commodities, it requires no other conditions for its existence — aside from the undeveloped forms arising from direct barter — outside those necessary for the simple circulation of commodities and money. Or rather, the latter is the condition of its existence. No matter what the basis on which products are produced, which are thrown into circulation as commodities — whether the basis of the primitive community, of slave production, of small peasant and petty bourgeois, or the capitalist basis, the character of products as commodities is not altered, and as commodities they must pass through the process of exchange and its attendant changes of form.” (p 325)

The extent of the role of the merchant depends on the mode of production. In an economy where the majority of production is for direct consumption, this role of the merchant will be limited, and reaches its height under capitalism, where nearly all production is of commodities for sale. But, the very existence of merchant capital promotes an extension of trade, and a growing proportion of economic activity ruled by exchange value. Even if a society only has a small surplus of products over what it has produced for direct consumption, when it exchanges these products, for a variety of others, its appetite for a wider variety of such products is stimulated, and so it is prompted to deliberately increase the extent of its own surplus production, solely for the purpose of exchanging it for these other products. To the extent that the merchant can provide them with ever new types of products, the more that appetite is stimulated.

“Hence, commerce imparts to production a character directed more and more towards exchange-value.” (p 326)

With the development of money, the exchange of commodities is intermediated by money, by repeated acts of buying and selling, performed by the merchant. But, initially these acts of buying and selling are not conducted by the merchant directly with the industrial producers.

“Under slavery, feudalism and vassalage (so far as primitive communities are concerned) it is the slave-owner, the feudal lord, the tribute-collecting state, who are the owners, hence sellers, of the products. The merchant buys and sells for many. Purchases and sales are concentrated in his hands and consequently are no longer bound to the direct requirements of the buyer (as merchant).” (p 326)

In these different types of society, wealth may be held in a number of different forms – slaves, land etc. - but the merchant's wealth is always in the same form – money. This money acts as capital, and must be held in this form to act as capital, because it is only in this form that it is able to continually buy in order to sell.

This is what distinguishes it from the exchange between producers, C – M – C, whose purpose is the exchange of use values, so as to obtain something you want in exchange for something you don't. Instead, for the merchant, M – C – M', the purpose is only to obtain a greater sum of exchange value itself.

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