Tuesday, 29 December 2015

Capital III, Chapter 21 - Part 9

Proudhon seems to believe that there is something specific to interest bearing capital that enables it to keep describing this circle. He says,

“"Since money-capital returns to its source from exchange through the accumulation of interest, it follows that reinvestment always made by the same individual continually brings profit to the same person," p. 154.” (p 347)

But, as Marx points out,

“The return of capital to its point of departure is generally the characteristic movement of capital in its total circuit. This is by no means a feature of interest-bearing capital alone. What singles it out is rather the external form of its return without the intervention of any circuit. The loaning capitalist gives away his capital, transfers it to the industrial capitalist, without receiving any equivalent. His transfer is not an act belonging to the real circulation process of capital at all. It serves merely to introduce this circuit, which is effected by the industrial capitalist.” (p 347)

But, the capital loaned to the industrial capitalist at the start of that circuit did not belong to him. The money-capitalist had not sold this capital to him in exchange for an equal amount of value, but had only sold to him the use value of the capital for a particular period of time, just as the worker does not sell himself to a capitalist, but only sells his labour-power for a given period of time. What did not belong to the industrial capitalist at the start of the circuit cannot belong to him at the end of it.

At the end of the circuit, the worker belongs to himself. He is not a slave. He can sell his labour-power once more. Similarly, the capital belongs to the money-capitalist that lent it, and can be loaned once more. What belongs to the industrial capitalist is what they have paid for – the use value of the workers' labour-power, now in the shape of the value created, and the use value of the capital, now in the shape of the profit contained in the end product.

“Passing through the process of reproduction cannot by any means turn the capital into his property. He must therefore restore it to the lender. The first expenditure, which transfers the capital from the lender to the borrower, is a legal transaction which has nothing to do with the actual process of reproduction. It is merely a prelude to this process. The return payment, which again transfers the capital that has flowed back from the borrower to the lender is another legal transaction, a supplement of the first. One introduces the actual process, the other is an act supplementary to this process. Point of departure and point of return, the giving away and the recovery of the loaned capital, thus appear as arbitrary movements promoted by legal transactions, which take place before and after the actual movement of capital and have nothing to do with it as such. It would have been all the same as concerns this actual movement if the capital had from the first belonged to the industrial capitalist and had returned to him, therefore, as his own.” (p 347-8)

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