Capital III, Chapter 28 - Part 3

As Marx describes, the circuit of commodity-capital is C' - M'. M - C … P … C'. The commodity always starts from the position that surplus value is incorporated within it. All its sale does is to realise that surplus value. But, a portion of M' will always form revenue rather than capital, because it must be used to meet the consumption needs of the capitalist, here the retailer. This is true whether the retailer is a corner shop owner, or Tesco. The dividend received by the Tesco shareholder represents revenue. It can be spent to finance consumption, just as the small shopkeeper uses part of their weekly profit to finance their consumption needs.

It is only that portion of M' that is again metamorphosed into commodity-capital that constitutes money-capital, but this appears as M, because at this point of the cycle, no additional surplus value has been created. If we look at the situation for the functioning retailer, therefore, they begin each cycle with the majority of their capital in the form of commodity-capital. As with all commodity-capital, its value already incorporates surplus value. So, its circuit begins with C'. The commodities, which comprise this commodity-capital are sold, C' – M'.

A portion of M' is then consumed by the retailer. But, whether this portion constitutes all or only part of the surplus value realised, the money-capital then used to purchase additional commodities, has not been expanded. It is only when it is transformed into commodity-capital once more, M – C', that it expands, before being realised once more, C' – M'.

It is this point, that a portion of the realised profit always constitutes revenue for the capitalist, and which they always, therefore, throw into circulation, once more, as such, rather than as capital, that Marx says, Tooke overlooks.

“To reduce the difference between circulation as circulation of revenue and circulation of capital into a difference between currency and capital is, therefore, altogether wrong. This mode of expression is in Tooke's case due to his simply assuming the standpoint of a banker issuing his own bank-notes. Those of his notes which are continually in the public's hands (even if consisting of ever different notes) and serving as currency cost him nothing, save the cost of the paper and the printing. They are circulating certificates of indebtedness (bills of exchange) made out in his own name, but they bring him money and thus serve as a means of expanding his capital. They differ from his capital, however, whether it be his own or borrowed. That is why there is a special distinction for him between currency and capital, which, however, has nothing to do with the definition of these terms as such, least of all with that made by Tooke.” (p 444-5)

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