Friday, 15 January 2016

Capital III, Chapter 23 - Part 4

For the industrial capitalist.

“In relation to him interest appears therefore as the mere fruit of owning capital, of capital as such abstracted from the reproduction process of capital, inasmuch as it does not "work,"; does not function; while profit of enterprise appears to him as the exclusive fruit of the functions which he performs with the capital, as the fruit of the movement and performance of capital, of a performance which appears to him as his own activity, as opposed to the inactivity, the non-participation of the money-capitalist in the production process.” (p 374)

This perception is based on an objective fact.

“... for interest flows to the money-capitalist, to the lender, who is the mere owner of capital, hence represents only ownership of capital before the production process and outside of it; while the profit of enterprise flows to the functioning capitalist alone, who is non-owner of the capital.” (p 344)

On this basis, it does not matter whether the capital employed was borrowed or not, because it now appears that the return to this capital is interest, and the amount of interest is determined by the average rate of interest, whereas the proportion of the gross profit, after the interest is deducted, is attributable solely to the functions of entrepreneurship.

The importance of this ideologically is clear, because, on this basis, the profit accrued by the capitalist, is no longer a consequence of the exploitation of labour by capital, but is nothing more than a remuneration of the special type of labour performed by the capitalist, whilst the interest on the capital is nothing more than the market price of capital sold as a commodity.

“The capitalist operating on his own capital, like the one operating on borrowed capital, divides the gross profit into interest due to himself as owner, as his own lender, and into profit of enterprise due to him as to an active capitalist performing his function. As concerns this division, therefore, as a qualitative one, it is immaterial whether the capitalist really has to share with another, or not. The employer of capital, even when working with his own capital, splits into two personalities — the owner of capital and the employer of capital; with reference to the categories of profit which it yields, his capital also splits into capital-property, capital outside the production process, and yielding interest of itself, and capital in the production process which yields a profit of enterprise through its function.” (p 375)

And as the surplus value divides into two, profit of enterprise and interest, at the level of the total social capital, personified by the money-capitalist and the industrial capitalist, both of these elements are determined by their own separate laws. And, as capitalist production develops, so that the mass of money-capital grows, and is increasingly monopolised in the hands of the money-capitalist, what begins as merely a quantitative division between profit of enterprise and interest becomes solidified into a qualitative difference representing the separate revenues and interests of these two class fractions.

“Interest, therefore, becomes firmly established in a way that it no longer appears as a division of gross profit of indifference to production, which occurs occasionally when the industrial capitalist happens to operate with someone else's capital. His profit splits into interest and profit of enterprise even when he operates on his own capital. A merely quantitative division thus turns into a qualitative one. It occurs regardless of the fortuitous circumstance whether the industrial capitalist is, or is not, the owner of his capital. It is not only a matter of different quotas of profit assigned to different persons, but two different categories of profit which are differently related to the capital, hence related to different aspects of the capital.” (p 375-6)

No comments: