It is this use value of capital that is the basis of its being a commodity. Yet, it is a use value that is not the product of labour. So, it has no value. In this respect, its like land. It is a commodity which is bought and sold, and which, therefore, has a market price, but which has not been produced by labour, and so has no value.
It is the fact that capital has the use value of being self-expanding value that creates a demand for it. This appears to be a contradiction. Capital as capital has no value, because this use value of being self-expanding value is not the product of labour, and yet the use value of capital that turns it into a commodity is that it is self-expanding value. But, this is no different than the situation with labour. Labour has no value. Labour is value, it is its essence and its measure. The use value of abstract labour is that it creates value and thereby surplus value. It is not labour, however, which is sold as a commodity, nor which has a price, but labour-power, the capacity, possessed by the labourer to undertake this labour. And labour-power does have a value, it is the product of labour, i.e. that required to produce the commodities required to reproduce the worker, and thereby their capacity to perform labour.
Marx expands on this idea in Theories of Surplus Value, in discussing productive and unproductive labour. If we take those cases where what appears to be bought directly is labour, for example where someone buys the service of a prostitute, a cook, a chauffeur and so on to provide them directly with a labour service, what they have bought is not the labour, but the service, i.e. the commodity they buy is not labour-power, but the actual product of the individual labour service. It is indeed, this difference that enables a capitalist brothel keeper, restaurant owner, or limousine service owner, to sell these services as commodities at their value, but to extract a surplus value from the workers they employ, because the value of the labour-power they buy from them to perform these services is less than the new value those workers produce.
“Suppose the annual average rate of profit is 20%. In that case a machine valued at £100, employed as capital under average conditions and an average amount of intelligence and purposive effort, would yield a profit of £20. A man in possession of £100, therefore, possesses the power to make £120 out of £100, or to produce a profit of £20. He possesses a potential capital of £100.” (p 339)
And, because this £100 in the hands of A has the potential of being used as capital, and self expanding to a value of £120, this use value is not available solely to A, but to anyone else that A is prepared to sell this use value to.
“If he gives these £100 to another for one year, so the latter may use them as real capital, he gives him the power to produce a profit of £20 — a surplus-value which costs this other nothing, and for which he pays no equivalent. If this other should pay, say, £5 at the close of the year to the owner of the £100 out of the profit produced, he would thereby pay the use-value of the £100 — the use-value of its function as capital, the function of producing a profit of £20.” (p 339)
Interest is then simply the name given to the market price of capital sold as a commodity. What is being sold, and what is paid for is not the capital itself, but its use value, its ability to self-expand. If I borrow £100 and pay £5 interest, the £5 interest is not the price of £100 of capital. If it were, everyone would pay £5 to obtain £100 in exchange! It is only the price of the use value of the capital, its use value to turn £100 into £120, for example.
On the one hand, therefore, we have a commodity owner; the owner of the £100. They are prepared to sell their commodity, at its market price. There is supply. On the other hand, there may be potential demand for this commodity, from all those who wish to utilise the use value of this capital, its ability to transform itself from being £100 into £120.
The market price of all commodities is determined by this interaction of demand and supply. But, as we have seen, this interaction is always pivoted around a central locus, determined by the exchange value of the commodity, prior to capitalist production, and the price of production under capitalism. But, this use value of capital has no value, and so no exchange value or price of production either. So, there can be no central locus around which the market price can revolve, as with other commodities.
The consequence is that there is no natural price for this commodity, no natural rate of interest. The rate of interest is solely a function of the demand for and supply of money-capital. Although there is no central point around which the market price can revolve, there are bounds to the range of prices. On the one hand, the suppliers of money-capital will not supply it for free. On the other, those that demand it, will not, normally, pay a higher price for it than the maximum profit that might be obtained from its use.
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