This capital is then not only for the borrower, because its use results in an expansion of its value, but it is also capital for the lender, because in lending it – selling its use value for a specific period of time – it expands in value too. The value that returns is greater than the value advanced.
“Hence it leaves him only for a specified time, passes but temporarily out of the possession of its owner into the possession of a functioning capitalist, is therefore neither given up in payment nor sold, but merely loaned, merely relinquished with the understanding that, first, it shall return to its point of departure after a definite time interval, and, second, that it shall return as realised capital — a capital having realised its use-value, its power of creating surplus-value.” (p 343)
The capital that is loaned may be either fixed capital or circulating capital. I might loan out a machine, or I may loan out, for example, workers. Or I might loan out materials, to be processed, or food and other means of subsistence to be paid to workers as wages. But, the money-capital loaned may also be either fixed or circulating. For example, I might loan out money for a short period, which I expect to be repaid, in full, at the end of the period, along with the interest. On the other, I might lend out a large sum for a long period, which is only repaid piecemeal, over the duration of the loan, for example, as with an annuity. The former is circulating capital, and the latter fixed capital.
“Certain commodities, such as houses, ships, machines, etc., can be loaned out only as fixed capital by the nature of their use-values. Yet all loaned capital, whatever its form, and no matter how the nature of its use-value may modify its return, is always only a specific form of money-capital. Because what is loaned out is always a definite sum of money, and it is this sum on which interest is calculated.” (p 344)
Circulating capital, whether it is comprised of commodities or money, is always returned in its original form, plus the interest. But, fixed capital in commodity form, cannot be returned in its original form, because it will have experienced wear and tear. The fixed capital is then returned, but, in addition to the interest, an additional payment of money is made to cover the wear and tear.
Whatever is said in respect of loaned money-capital, essentially applies to other forms of loaned capital.
“The loaned capital flows back in two ways. In the process of reproduction it returns to the functioning capitalist, and then its return repeats itself once more as transfer to the lender, the money-capitalist, as return payment to the real owner, its legal point of departure.” (p 344)
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