Capital III, Chapter 20 - Part 9

For so long as production remains relatively undeveloped, and societies produce still primarily for use value, their concern to exchange their surplus products at their value remains secondary to them, which means that merchants capital can thereby appropriate the major part of the surplus product, which in its money form appears as a surplus value that is increasingly amassed as money hoards in the hands of the merchants.

“Aside from the fact that it exploits the difference between the prices of production of various countries (and in this respect it tends to level and fix the values of commodities), those modes of production bring it about that merchant's capital appropriates an overwhelming portion of the surplus-product partly as a mediator between communities which still substantially produce for use-value, and for whose economic organisation the sale of the portion of their product entering circulation, or for that matter any sale of products at their value, is of secondary importance; and partly, because under those earlier modes of production the principal owners of the surplus-product with whom the merchant dealt, namely, the slave-owner, the feudal lord, and the state (for instance, the oriental despot) represent the consuming wealth and luxury which the merchant seeks to trap, as Adam Smith correctly scented in the passage on feudal times quoted earlier. Merchant's capital, when it holds a position of dominance, stands everywhere for a system of robbery, so that its development among the trading nations of old and modern times is always directly connected with plundering, piracy, kidnapping slaves, and colonial conquest; as in Carthage, Rome, and later among the Venetians, Portuguese, Dutch, etc.” (p 330-1)

Yet, as Marx describes, at the same time, the very action of that merchant capital establishes money as world money, as a result of this trade; it more and more equalises market prices towards the values of the products it trades; it encourages more production to be undertaken for the purpose of such trade, and thereby transforms these products into commodities, and transforms the values of products into the exchange value of commodities, as they are compared one to another, and ultimately measured against the universal equivalent form of value – money.

“The development of commerce and merchant's capital gives rise everywhere to the tendency towards production of exchange-values, increases its volume, multiplies it, makes it cosmopolitan, and develops money into world-money. Commerce, therefore, has a more or less dissolving influence everywhere on the producing organisation, which it finds at hand and whose different forms are mainly carried on with a view to use-value.” (p 331-2)

In the ancient world, the undeveloped nature of production meant that commercial capital dissolved what it encountered, which descended into slavery.

“However, in the modern world, it results in the capitalist mode of production. It follows therefrom that these results spring in themselves from circumstances other than the development of merchant's capital.” (p 332)

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