Friday, 1 January 2016

Capital III, Chapter 21 - Part 12

As discussed earlier, capital as a commodity is similar then to labour-power. By paying the worker the value of their labour-power, that labour-power is restored to them. When the industrial or merchant capitalist borrows money-capital, they similarly restore that money-capital to the lender. But, here is the difference. Labour-power is not capital. The worker only receives the value of labour-power in return. But, the money-capitalist, by contrast, not only receives back the capital they loaned, but an additional amount besides.

The industrial capitalist buys labour-power to obtain its use value, of being able to create new value and surplus value.

“And in like manner the use-value of loaned capital appears as its faculty of begetting and increasing value.” (p 351)

It is not the capital that the money-capital alienates, as a commodity, but only this use value, of being able to self-expand. Because the money-capitalist does not alienate the capital itself – it remains in their ownership – they receive no value in exchange for it. The value of the capital never leaves their ownership.

The money-capitalist relinquishes possession of the money-capital, but not ownership. In contrast to normal commodity purchases, it is here the seller that hands over value, and the buyer that receives it. That is because, in this transaction, the thing being sold is value itself, and its ability as capital to self-expand.

“The use-value of the loaned money lies in its being able to serve as capital and, as such, to produce the average profit under average conditions.” (p 352)

The buyer of a commodity does so to obtain its use value and what they pay for it is its value. The borrower borrows money-capital to obtain its use value, but what do they pay for it? As indicated earlier, when a commodity is exchanged, its value is known, but what is the value of this use value of capital? Unlike those other commodities, this use value is not one that has been produced by labour.

The extent of the use value of the capital depends on its ability to self-expand. The more it is able to do so, the more use value is alienated. The more therefore, of this use value will be demanded, and consequently, the higher the market price will be. For other commodities, this higher market price would increase the profit created, from the sale of these commodities. That would encourage the investment of additional capital, in this sphere, pushing prices back down towards the value of the commodity, until the rate of profit returned to the average.

But, firstly, there is no cost of production, and no value for this commodity – capital. If demand for money-capital rises, because the potential for profits on productive-capital rises, then interest rates may rise, but there is no objective basis for determining how much additional supply might be forthcoming as a result, because there is no value, or price of production, for this commodity, to act as a pivot around which the market price would move.

But, also, aside from the potential to mobilise additional money-capital, via primary accumulation, the supply of this money-capital itself depends upon the mass of profits created by productive-capital, because the additional money-capital only exists because it is the money form of the realised surplus value, created in production. The available money-capital will then depend upon the mass of this realised surplus value, compared to the immediate requirements for its use for accumulation.

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