Capital III, Chapter 32 - Part 6

“In so far as money functions in the circuit of capital, it constitutes indeed, for a moment, money-capital; but it does not transform itself into loanable money-capital; it is rather exchanged for the elements of productive capital, or paid out as a medium of circulation in the realisation of revenue, and cannot, therefore, transform itself into loan capital for its owner.” (p 509)

In other words, the money received by a firm in exchange for its commodities, exists as money not money-capital. It is only money-capital in the sense that it is the money equivalent of the commodity-capital. But, it cannot be considered money-capital, because, as seen above, an uncertain proportion may simply remain as a money hoard. Only when the money is used to buy productive-capital – either to replace that consumed, or for accumulation – does the money momentarily become money-capital. But, it is only momentarily, because as soon as it assumes that function, it has already passed out of the hands of its owner, in exchange for productive-capital!

It is only then the remaining portion that becomes loanable money-capital.

“But in so far as it is transformed into loan capital, and the same money repeatedly represents loan capital, it is evident that it exists only at one point in the form of metallic money; at all other points it exists only in the form of claims to capital. With the assumption made, the accumulation of these claims arises from actual accumulation, that is, from the transformation of the value of commodity-capital, etc., into money; but nevertheless the accumulation of these claims or titles as such differs from the actual accumulation from which it arises, as well as from the future accumulation (the new production process), which is promoted by the lending of this money.” (p 509)

It appears that loan capital always exists in the form of money. If I borrow £100 from the bank, and the bank gives me £100 in gold coins, it is visibly the case that its loan capital was in the form of money. But, as soon as it does so, its loan capital is no longer in this form. I have the gold coins not the bank. The bank's loan capital now exists as fictitious capital, as a claim on me for the £100 plus interest. In fact, with the development of banking and credit, even this loan does not take the form of a loan of actual money. Rather than giving me £100 in gold coins, the bank opens a credit account for me to that amount, or deposits that amount into my account as an overdraft. I then make direct transfers to other accounts. Even to the extent that I withdraw money from the account, from the loan provided, this is not actually money, but only money tokens, in the form of banknotes, that represent a given amount of money.

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